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Federal Judge Deals AT&T Open Access Defeat

U.S. District Judge Owen Panner has upheld a local government order for AT&T Corp. to open up its broadband cable network to competitors in Portland, Ore.

In a blow to the telecommunications giant, Judge Panner late Friday said cable regulators in Portland had the right to make open access a condition their approval of AT&T's $55 billion purchase of cable-TV giant Tele-Communications Inc.

The court rejected AT&T's argument that federal law prohibits city and county officials from forcing the company to open its cable network facilities to Internet service providers.

In handing down his decision, Judge Panner wrote, "The issue is whether the city [of Portland] and county [Multnomah] have the power to require access to the cable modem platform as a condition of approving AT&T's takeover of the cable franchises. To resolve the legal issue, I don't need to consider whether the open access requirement is good policy. I conclude that the open access requirement is within the authority of the city and county to protect competition."

Mark Rosenblum, AT&T vice president - law, said the Portland decision is inexplicable.

"AT&T raised numerous substantial challenges to these ordinances, going to the jurisdictions' legal authority to adopt these rules as well as the soundness of the rules themselves. The most significant aspect of the decision is its failure to address any of these challenges in a meaningful way."

Rosenblum added 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."

AT&T was quick to point out that the real losers are likely to be the citizens of Portland and Multnomah County as the decision can only delay deploying new services to the area.

Don Janke, president of Internet Ventures, Inc. praised the ruling. His company has been battling TCI in several territories to get the cable operator to open its networks to competitors.

Janke said the decision "reaffirms the rights of local governments to impose open access to protect competition for broadband cable Internet services."

"Leased access is stable and predictable and a means to implement the judge's decision in the most efficient manner to achieve consumer choice."

In January, IVI and affiliate Internet-On-Ramp filed for leased access carriage in Spokane, Wash. IVI requested that leased access options be a part of the city's approval of the AT&T - TCI merger.

IVI insists that the Portland decision must carry over into other markets where the ISP has petitioned the courts for leased access to cable networks.

"Based on the judge's decision, it is incumbent on the city government of Spokane to reopen its consideration of Internet-On-Ramp's complaint against TCI of Washington for failure to grant leased access, Janke said.

As outlined in Section 612 of the Communications Act of 1934, as amended, leased access offers entities unaffiliated with the local cable operator the opportunity to utilize channel space. Section 612 has been the cornerstone of IVI's argument to "promote competition in the delivery of diverse sources of video programming and to assure that the widest possible diversity of information sources are made available to the public."

In a February, TCI indicated by letter that it "does not believe that it is required to provide leased access carriage for an Internet access service" and that the company was not willing to do so. TCI indicated that the company did not believe providing for leased access to its network was a valid interpretation of neither the letter nor the spirit of the law.

In a May, Spokane's city manager refused to take action against TCI, suggesting that a complaint by IOR against TCI could not be acted upon until the FCC clarified the issues.

Janke has crusaded for leased access in Spokane, Wash. and other West Coast markets. Last week he urged the Federal Communications Commission to produce a declaratory ruling confirming that ISPs have the right to achieve full carriage under leased access rules.

Internet Ventures has also applied for leased access in Stockton and Ventura, Calif., Durango, Colo. as well as in several communities in Oregon and southern Washington..

IVI has four active cable access installations with California cable operators Avenue TV Cable in Ventura, and Cox Communications in Humboldt, iATI in Medford, Ore. and Davis Communications at Eastern Washington University. The ISP provides PeRKInet cable modem service for about 17,000 subscribers.

IVI is targeting U.S. markets with populations less than 500,000 and currently operates 14 ISPs in California, Colorado, Idaho, Oregon and Washington.



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