Poor Athm...and its going to get much worse..good 4 my aol
Friday June 4, 6:21 pm Eastern Time
FOCUS - US Court upholds open access on AT&T cable
(adds closing share prices, para 6.)
By Aaron Pressman
WASHINGTON, June 4 (Reuters) - AT&T Corp. (NYSE:T - news) must allow competing Internet service providers onto its cable system in Portland, Oregon under a court ruling issued Friday that dealt a setback to the company's plans to keep exclusive control of its new high-speed network.
Long distance giant AT&T, currently the second largest U.S. cable operator, said it would appeal but Internet service providers that have been pushing for open access to cable Internet lines said the ruling could prompt other localities to impose similar conditions.
''We continue to believe strongly in the merits of our legal arguments,'' said AT&T vice president Mark Rosenblum. ''The actions taken by officials of Portland and Multnomah County are beyond the legal authority municipalities have to review cable franchise transfers. Clearly we will continue to pursue our legal case.''
A spokeswoman for a coalition of Internet companies that have sought open access, including the largest online service America Online (NYSE:AOL - news), hailed the ruling as likely to spark more action by local authorities.
''The judge's ruling sends the message that thousands of communities have that jurisdiction and that they can make their own decisions in favor of a competitive Internet future,'' said Sydney Rubin, a spokeswoman for the OpenNet Coalition.
News of the decision sent AOL stock zooming up $10.5625 to close at $116.3125 on the Nasdaq. AT&T shares fell $0.9375 to close at $53.3125 on the New York Stock Exchange, while the company's high-speed Internet service AtHome Corp. (Nasdaq:ATHM - news) lost $10.75 to close at $94.50 on the Nasdaq.
In the past, lawmakers in Congress and regulators at the Federal Communications Commission have declined to require open access on cable Internet systems. An FCC spokesman said Friday the agency was reviewing the decision and had no immediate comment.
In the ruling, U.S District Judge Owen Panner upheld the authority of the city of Portland and county of Multnomah in Oregon to require AT&T to allow others onto its cable Internet network as a condition of the company's $48 billion acquisition of cable operator Tele-Communications Inc.
Absent the condition, AT&T planned to require all customers to buy Internet services from AtHome, which is owned by AT&T and other cable operators. That is unlike Internet service offered over telephone lines, because phone companies are prohibited from such exclusive arrangements.
Judge Panner rejected a raft of objections from AT&T, including arguments that federal law prohibited the city and county from acting and that open access unduly burdened interstate commerce and violated the First Amendment of the Constitution.
''The open access requirement is within the authority of the city and county to protect competition,'' Panner wrote.
AT&T had said it would be unable to recoup its investment in upgrading its cable facilities to offer high-speed Internet access if it lost exclusive control of the provision of Internet services.
''The real losers are likely to be the citizens of Portland and Multnomah County,'' AT&T's Rosenblum said. ''This decision can only have the potential to delay and reduce the new services that companies like AT&T will be able to offer them.''
Portland City council member Erik Sten, in a telephone call with reporters, said the city would select another cable operator to provide high-speed service if AT&T chose not to.
''(If AT&T will not do it), then we'll look for another provider who will,'' he said.
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More Quotes
and News: America Online Inc (NYSE:AOL - news)
At Home Corp (Nasdaq:ATHM - news)
AT&T Corp (NYSE:T - news)
Related News Categories: US Market News
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