News

Pa. Town Looks to Oust AT&T

4/17/2001 9:44 AM Eastern

A Pennsylvania hamlet is embracing the role of David, asking a court to
appoint a trustee to operate its local cable company rather than Goliaths
AT&T Broadband or Comcast Corp.

In a suit filed in U.S. District Court for the Western District of
Pennsylvania, the Borough of Blawnox, a Pittsburgh suburb, wants the court to
oust the operators.

Officials said in the suit, filed April 13, that they denied consent for
transfer of the system, operating as Comcast Cablevision of the South Inc., to
AT&T Corp. Regulators noted, though, that the transfer expired anyway, and
borough officials alleged that the operators deceived the community about the
true ownership status after the transfer denial.

'It is clear to me, based upon AT&T's arrogant and high-handed attitude
toward subscribers, coupled with wholesale programming changes, that AT&T is
really calling the shots,' borough council president Sam McNaughton said in a
prepared statement.

The actions of the operators have caused the regulators to distrust the cable
companies. Since the 1,626-population borough isn't able to staff a municipal
cable overseer, it has to be able to trust the company it authorizes to enter
residents' homes, explained Fred Polner, an attorney for the community. If the
community can't trust the franchisee, the operator fails the 'legal ability'
test communities apply when considering a transfer, he said.

Further, the suit asks the court to enjoin either company from operating the
system and for an extended refranchise deadline for the one that expired March
30.

AT&T Broadband spokesman Steve Lang noted that
municipalities representing 654,000 cable customers approved the
Comcast-AT&T transfers. Tiny Blawnox was the only exception. He expressed
confidence that Comcast -- the entity at the refranchising bargaining table
in Blawnox -- will be able to work out a compromise.

'This sounds like a suit filed in anger,' opined cable attorney Paul
Glist.

In the past, communities have withheld transfer approval, but the operator
has continued to run the local system. For instance, Los Angeles withheld its
approval of Group W cable to Century Communications Corp. for years, but the new
owner continued operations.

'Courts have told cities that they can't just pull the
plug,' Glist noted.