To: ChinuSFO who wrote (20352 ) 6/5/1999 7:18:00 AM From: Mick Mørmøny Read Replies (2) | Respond to of 41369
Judge Says Local Officials Can Force AT&T to Share Cable Lines By MATT RICHTEL The New York Times, June 5, 1999nytimes.com In a decision that could have far-reaching implications for consumers and the telecommunications industry, a Federal judge in Portland, Ore., ruled yesterday that a local government could force the AT&T Corporation to share its cable lines with competing Internet service providers. The case has represented one front in a battle that pits AT&T against a coalition of Internet service providers and consumer groups that assert that an emerging source of high-speed Internet access, cable modems, faces monopoly control. The decision yesterday, involving Portland and the county of which it is a part, may not have any immediate practical effect because AT&T does not offer cable modem service in Portland and the ruling does not bind AT&T or other cable operators elsewhere. But analysts called it a blow to AT&T and said other cities could be prompted to follow Portland's lead. Mark C. Rosenblum, vice president for law for AT&T, called the decision "inexplicable," arguing that Portland and the county are beyond their legal authority in requiring open competition. He said the company intended to appeal the ruling, which was issued by Judge Owen M. Panner of the United States District Court. A parallel battle is being waged in Washington, where America Online and other Internet providers have been lobbying regulators and Congress to require cable companies to offer high-speed Internet subscribers a choice of service providers, without advantage to any one. The Federal Communications Commission has taken a wait-and-see attitude, but some analysts said the Oregon ruling would force regulators to act. "The court's decision is going to force the F.C.C. to admit there's a pink elephant in the parlor," said Andrew Jay Schwartzman, president of the Media Access Project, a public interest law firm. About 30 million American homes have Internet access over conventional phone lines, called dial-up access. About half a million gain access over cable or phone lines that are 10 to 80 times faster than typical phone connections, and research firms project that the number of such high-speed subscribers will grow to 10 million to 16 million by 2002. The Portland dispute had its genesis in June 1998, when AT&T announced its intention to acquire Tele-Communications Inc., then one of the largest cable companies in the nation, with 14 million subscribers. In a seeming rubber-stamp maneuver, hundreds of municipalities around the country needed to authorize the transfer of TCI cable franchises, which had been granted locally, to AT&T. But in the Portland area, consumer groups and Internet service providers urged politicians to challenge the deal. They asserted that AT&T should not be allowed to use TCI's cable lines to offer Internet access exclusively through the At Home Network, a cable modem service provider that is partly owned by AT&T. The Portland City Council and the Multnomah County Commissioners voted in December not to approve the franchise transfer unless AT&T agreed to allow competing providers to offer high-speed Internet access over its lines -- just as local phone companies must connect to a variety of long-distance providers. Cable companies argue that there is little incentive for them to undertake the considerable capital expense of upgrading their lines for high-speed Internet connections if they are merely to become a pipe through which others deliver service. But in his ruling yesterday, Judge Panner wrote that AT&T had "no contractual right under the franchise agreements to exclude competitors from the cable modem platform." Scott C. Cleland, managing director of the Legg Mason Precursor Group, a Washington-based firm that advises institutional investors, called the decision "very significant" and said it could embolden other cities. "While the marketplace was looking at Congress and the F.C.C., the grass roots caught fire," he said. -------------------------------------------------------------------------- Matt Richtel at mrichtel@nytimes.com welcomes your comments and suggestions. --------------------------------------------------------------------------