Executives at Comcast and MediaOne received word of the offer only an hour before it was announced. MediaOne confirmed that it had received the bid, which AT&T made public shortly after the stock markets closed. In a terse statement, MediaOne said the bid was under review. "We have nothing to add at this time," a MediaOne spokesman said. Comcast declined to comment. C. Michael Armstrong, AT&T's chairman, said the offer far exceeds Comcast's and denied it represents a hostile bid. "This permits us to be much more of a national player because these assets are in strategic cities," he said.

There had been speculation about a possible counter bid by AT&T almost since the Comcast-MediaOne deal was announced. But most AT&T-watchers considered such a move to be too expensive andunwieldy for the long-distance company, which is still digesting its rich purchase of cable company.

Tele-Communications Inc. That deal was AT&T's springboard for using cable-TV lines to offer local phone service. It closed earlier this year. A For-Sale Sign Leo Hindery Jr, head of AT&T's cable unit, which now houses TCI's cable assets, said the move shouldn't have come as a shock. He noted that AT&T and TCI, in announcing their deal last June, openly flagged the idea that they would be on the hunt for more cable-TV properties. "Nobody ever listens," Mr. Hindery said. Besides, he said, "MediaOne put a for-sale sign in their front yard" in doing the Comcast deal.

If its bid for MediaOne goes through, AT&T said its cable systems would pass approximately 26.5 million US households. This would give AT&T "a significant presence" in 18 of the top-20 markets, including such major urban centers as Atlanta and Los Angeles, where MediaOne currently has one-third of the market. TCI's systems, by comparison, areconcentrated in many rural markets.

MediaOne declined to compare the two offers, saying it hadn't had time to properly review the AT&T bid. But people close to MediaOne said the AT&T offer, on its face at least, appears to be superior. "This offer was clearly structured to put a stake in the ground," said one executive. Another person close to Comcast, sucking in his breath, summed: "It's staggering." AT&T said it would pay $30.85 in cash plus 0.95 share of AT&T stock for every MediaOne share. Based on the close of AT&T's shares Thursday in New York Stock Exchange composite trading of $56.75, the total transaction would be valued at about $54 billion, or $85 a share. AT&T said it would also assume $45 billion in debt and preferred equity.

MediaOne shares rose $2.5625 to $69.50 in Big Board trading. Maintain Value of $85 AT&T also said the cash portion of its offer would be increased to offset as much as a 10% decline from AT&T's closing stock price of $57 on Wednesday. "This will maintain a value of $85for every MediaOne share if AT&T's stock trades between $57 and $51.30 a share," AT&T said. "If AT&T's stock price increases, MediaOne shareowners will enjoy the full upside appreciation." If AT&T's stock price drops below $51, however, there would be no protection for MediaOne shareholders, and AT&T could wind up paying an additional $3.5 billion.