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1$ <br />Exhibit II <br />REQU]REMENTS OF FCC'S CONDITIONED APPROVAL <br />OF THE AT&T-MEDIA,ONE MERGER <br />• As anon-severable condition to granting the application, the FCC requires the applicants <br />to complete one of the following options to reduce its attributable ownership interests to <br />30% of Multichannel Video Programming Distributor (MVPD) subscribers nationwide: <br />o divest their interests in Time Warner Entertainment; <br />o insulate their interests in Time Warner Entertainment (TWE) by ending <br />involvement in TWE's video programming activities, which entails selling <br />AT&T's programming interests, including Liberty Media Group; or <br />o -divest their .interests in other cable systems, which involves divesting cable <br />systems serving approximately 11.$% of MVPD subscriber's nationwide (i.e., <br />more than 9.7 million subscribers or more than half of AT&T's current <br />subscribers). <br />• The merged firm must file with the~Cable Services Bureau, within six months from the <br />closing of the merger, a written document specifying which of the foregoing three <br />compliance options it has elected to pursue. <br />• The merged firm must complete the elected compliance option by May 19, 2001. <br />• If the merged firm has not completed the elected compliance option by the May 19, 2001 <br />deadline, then it will be required to place into an irrevocable trust for the purpose of sale <br />'the assets that it must divest to satisfy the 30% limit. <br />• . Sixty days before the compliance deadline, May 19, 2001, the merged firm must file with <br />the Cable Services Bureau a written document that either (a) states that it will be in <br />compliance by the deadline, or (b) states that it will not be in compliance and describes <br />the irrevocable trust arrangement that it will complete by the May 19, 2001 deadline. <br />• During the period prior to compliance with the foregoing conditions, the merged firm <br />must comply with interim conditions (originally proposed by the applicants) that are <br />designed to mitigate the potential harm to the diversity of programming and competition <br />during the compliance period. <br />• Appendix B of the FCC's Memorandum Opinion and Order lists the interim conditions <br />and related enforcement mechanisms, which include safeguazds to limit the merged firm's <br />involvement in the video programming activities of Time Warner Entertainment and the <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6$6$ <br />