 alongside the cable company's TV programming and high-speed Internet service. TCI needed capital to modernize its cable plant SO that it could add channels and new services. In fact, at first, Malone thought the AtHome Corporation might be a model that AT&T could follow. The majority of AtHome was owned by the cable companies that carried its high-speed Internet service, and it gave 40 percent of its revenue to them in exchange for using their cables. Malone even arranged for Armstrong to secretly meet the heads of the other cable companies at their annual industry convention in Atlanta in May of 1998. Armstrong made his pitch on a conceptual basis, and they knocked it down on practical terms. If they had another dollar to invest, they would put it into something like pay-per-view movies, which they un- derstood, not phone service. Besides, their experts said that practical phone-over-cable service was still several years away, when they would have completed the switch from analog to digital technology. Investing in analog phone service was throwing money away. 2 Back in 1998, the one cable company, other than TCI, that had dabbled in providing analog phone service over cable-Cox Commu- nications-didn't think it needed AT&T's help. So TCI was the only girl at the party who wanted to dance. But when the two companies tried to work out a joint venture, they got hung up on details such as how much bandwidth to dedicate to communications service, how to allocate capital costs, how to split revenue, and SO on. These were pre- cisely the issues that had cratered discussions with several cable com- panies under Bob Allen several years earlier. In the end, Armstrong decided that it would be easier to simply merge the two companies. He had the flexibility to buy TCI because Bob Allen had left AT&T with a pristine balance sheet. Even after as- suming $1.1 billion in Teleport debt, the company had enough cash on hand (nearly $8.5 billion) to cover nearly all its outstanding debt. The TCI deal would add $16.5 billion in deb