In 1963, Hostetter invested $4,000 in a cable company with a fraternity brother. Continental Cablevision would eventually become the largest privately held cable company in the country, and sell to US West for $11 billion.
Hostetter would later buy the company back, rename it MediaOne, and sell it to AT&T for $58 billion three years later.
Amos B. Hostetter Jr. has enjoyed an idyllic early retirement. Since exiting the cable world abruptly two years ago, the 62-year-old billionaire stockholder in MediaOne Group has been a devoted family man, spending time with his three young children. He has also taken a strong interest in public service, chairing the board of trustees at his alma mater, Amherst College, and setting up a family foundation with his wife, Barbara.
But as Comcast Corp. (CMCSA) found out, the notion that the low-profile Bostonian would fade into silk-lined obscurity was dead wrong. After balking at the terms Comcast offered for his 9.5% MediaOne stake, Hostetter resurfaced as a driving force behind AT&T's surprise $58 billion counterbid for MediaOne (UMG). Despite the threat of a higher Comcast bid supported by everyone from Microsoft (MSFT) to MCI WorldCom (MCIW), on May 4, AT&T (T) emerged the victor. Comcast backed off in favor of swapping some cable systems with the telephone giant and taking a $1.5 billion breakup fee.
''GRACE.'' Now, Hostetter aims to be a key player behind AT&T's plan to morph into a communications juggernaut offering all kinds of broadband services to consumers. He will join its board and become nonexecutive chairman of the unit that would house the country's largest cable operator as well as residential-phone and Internet-access services. ''The Amos Hostetter piece is important to AT&T managing this broadband property,'' says C. Michael Armstrong, AT&T's chairman and CEO. ''How often do you get to [add] staff before you buy?''
Armstrong is being a bit cute: Far from a staffer, Hostetter intends to play an advisory role to Leo J. Hindery, the powerful former Tele-Communications Inc. president who now heads AT&T's Broadband and Internet Services unit. And he will sit on the board alongside fellow cable pioneer John C. Malone, AT&T's biggest single shareholder since its deal to buy TCI closed last month. While Armstrong had plenty of firepower before, he may need all the help Hostetter can muster to roll out his unproven strategy of selling local phone service over cable.
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