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To: GraceZ who wrote (23283)	6/22/2000 3:08:00 PM
From: Jack Hartmann	Read Replies (1) \| Respond to of 29970

More on victory AT&T Wins Court Battle Over Opening Cable TV Lines (Update1) By Heather Fleming Phillips San Francisco, June 22 (Bloomberg) -- AT&T Corp., the No. 1 U.S. cable television company, can't be forced by local communities to lease high-speed cable connections to rivals, a federal appeals court ruled. The 9th U.S. Circuit Court of Appeals overturned a judge's decision last year that upheld Portland's ruled that forced AT&T cable to open its lines to rivals of its affiliated Internet service provider, Excite At Home Corp., on the grounds that it had overstepped its authority. The ruling is a setback for America Online Inc., Earthlink Inc. and other Internet service providers that had been lobbying local governments nationwide for rules giving them access to cable companies' fast Internet hook-ups. Yet, the court found that cable Internet service is a telecommunications service, opening the door for the Federal Communications Commission to extend to cable services rules that apply to telephone companies. ``AT&T won the battle and lost the war,'' said Scott Cleland, managing director of Legg Mason Inc.'s Precursor Group. For a year, cable companies have argued that they shouldn't be subject to rules forcing them to lease lines because they weren't a telecom service, said Cleland. Now that the court disagrees, ``It's like an asteroid hitting the cable sector,'' he said. ``It forces the FCC's hand.'' So far, the commission has vigorously opposed efforts to impose rules that could slow the growth of high-speed Internet, or broadband, networks. ``The FCC had made clear it does not want to see cable broadband deployment regulated,'' said Paul Glenchur, an analyst with Charles Schwab Corp.'s Washington Research Group. AT&T's shares climbed 1 3/4 to 36 3/4 in midafternoon trading. America Online's shares fell 1 3/8 to 56 1/8. At Home shares rose 2 3/4 to 21 11/16. Further Appeals Possible The court's ruling is only binding in the nine states covered by the 9th Circuit -- including Washington, California and Oregon -- though the decision could carry weight in other pending court cases. It will also deter other local governments from voting to impose access requirements. Portland officials have said they may appeal the decision to the Supreme Court. That could delay the outcome of the case until 2001 since the court has scheduled all its cases for 2000. AT&T and the FCC didn't immediately comment on the decision. Internet service providers have been anxious to gain access to cable companies' connections that are up to 100 times faster than the standard dial-up Internet hook-ups. The companies are counting on consumers spending more time online browsing, chatting and shopping if the information is delivered faster. Cable Investments Anxious to lock in such speedy connections, America Online earlier this year announced its plans to buy No. 1 cable TV company Time Warner Inc. for $145 billion to gain access to its 13 million households. Cable companies have been investing billions of dollars to upgrade their networks to offer the fast Internet connections, video-on-demand and phone service over cable lines. That comes as local phone companies are improving their networks to offer faster Internet access with so-called digital subscriber-line technology. Because of their multibillion dollar investment, the cable companies have argued that regulators should keep their hands off and let the companies negotiate access arrangements one-on-one. AT&T's appeal came after a U.S. District Court in Portland rejected the company's request to overturn Portland's imposition of an access requirement before authorizing AT&T to acquire Tele- Communications Inc.'s operating franchise. In its review, the appeals court examined how high-speed Internet service over cable lines should be categorized for regulatory purposes -- as a cable TV service or a telecommunications service. Cable service is regulated locally, while the U.S. Federal Communications Commission has authority over telecommunications services. Intense Debate The debate over so-called open access intensified last January when the FCC decided to refrain from imposing national requirements, and urged the companies to work out arrangements. Internet companies then shifted their focus to local governments. Portland and surrounding Multnomah County were the first to impose an access requirement, followed by Broward County, Florida, and other municipalities. The Internet companies' efforts for access were gaining nationally until the cable companies took much of the steam out of the fight by striking access agreements on their own. AT&T, the largest cable company, announced in December an agreement in principle to provide access to its cable lines. Under the plan, rivals will be able to lease the high-speed connections beginning in June 2002 after expiration of its exclusive agreement with Excite At Home, which is majority owned by AT&T. MindSpring endorsed the agreement. Now that America Online and Time Warner are combining, Time Warner has shifted its position on access and now has promised to make its cable network available to rivals. Time Warner and AT&T combined serve more than half of U.S. cable TV households. Yet, even with their open access promises small Internet service providers and consumer groups continue to push for a national policy because of concern that smaller companies won't have any leverage in negotiating the terms for the access. quote.bloomberg.com *************** I doubt Portland would appeal. Jack

To: GraceZ who wrote (23283)	6/22/2000 3:09:00 PM
From: opalapril	Read Replies (1) \| Respond to of 29970

It's likely there will be a Supreme Court appeal, and with conflicting rulings in the circuit courts, probable the Supreme Court will take the case.