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Broward Victory Party Looks a Bit Premature

11/26/2000 7:00 PM Eastern

Cable may have earned a hollow victory in Broward County, Fla., where a federal judge shot down local officials' attempt to impose open-access regulations.

But local-franchising experts believe the First Amendment win by Comcast Corp. and AT & T Broadband came too late to derail an access train that has already left the station.

U.S. District Court judge Donald M. Middlebrooks found the South Florida county violated the First Amendment by demanding the two MSOs furnish unaffiliated Internet-service providers with access to their high-speed cable platforms.

But private endeavors, such as AT & T's $20 million access trial in Boulder, Colo.-as well as Federal Trade Commission pressure on America Online Inc. and Time Warner Inc.-may have already made open access a foregone conclusion.

"It will be a footnote," said David Olson, director of franchising for Portland, Ore., where the access issue first surfaced two years ago. "We're way beyond whether open access is going to be implemented. It's now a matter of where, when and how."

As director of the Mount Hood Cable Regulatory Commission, Olson became the chief cheerleader for open access two years ago, when he convinced six Portland-area jurisdictions that AT&T should unbundle the old Tele-Communications Inc. systems it had acquired in the region.

Although Olson's agency lost its case in the 9th U.S. Circuit Court of Appeals earlier this year, the ruling apparently convinced the MSO to give ground on the issue. The reason: in finding in favor of cable operators, the 9th Circuit ruled that cable modems provide a telecommunications service, and are therefore exempt from local regulation. That meant data-over-cable could be subject to the federal common-carrier edicts imposed on local-exchange carriers.

AT&T is now running an open-access trial that will determine the feasibility of offering unfettered ISP access to high-speed cable lines.

Meanwhile, the FTC has made clear it will require unbundling in exchange for approving an AOL-Time Warner merger, a demand that prompted the Federal Communications Commission to abandon its policy of vigilant restraint.

"It's chapter two of open access," Olson said.

Not so, said AT&T in a statement that called the Broward decision "the third [loss] in a row since last summer invalidating 'forced-access' ordinances adopted by local franchise authorities." The MSO insisted the ruling had removed "any doubt about the invalidity of such ordinances."

"AT&T looks forward to offering its cable customers a choice of ISPs on its cable systems," the statement said. "In fact, we started a technical trial this month to help us prepare for ISP choice.

"But, as we've argued all along, that choice will best be offered as a result of market forces, not local ordinances or government regulation."

Just because the cities have lost in Portland and Henrico County, Va.-in a lower-court decision now before the 4th U.S. Circuit Court of Appeals-Broward County does not necessarily represent a proverbial third strike.

Scott Cleland, CEO of the Precursor Group, a Washington D.C.-based independent research outfit, said the Broward County ruling was "unlikely" to survive on appeal. The 9th Circuit decision ignored cable's First Amendment argument, he noted.

"So now you have two appeals court decisions that contradict each other," Cleland said. "This judge says open access infringes on the First Amendment. But must-carry was upheld 5-to-4 by the Supreme Court."

Other jurisdictions believe there may be more than one way to gain access to cable's high-speed pipe.

In St. Louis, which has its own access ordinance on the books, local officials expect to enact a new cable regulatory code by year-end. The measure, which would apply to all cable operators within the city limits, will try and take a more "sophisticated" approach to the access issue.

"Cities have said they want open access, but the courts have said, 'You can't mandate it,'" said St. Louis cable administrator Susan Littlefield. "So, we'll focus on the end result and try to get consumer choice by looking at things like consumer protection and consumer privacy."

Littlefield pointed out some of the judicial contradictions. To the 9th Circuit court, data access is a telecom service, but it's a violation of the 1996 Telecom Act in Virginia and of the First Amendment in Florida.

"That speaks to the fact that nobody knows exactly what open access really is," she said.

Fairfax, Va., which slapped an open-access ordinance on Cox Communications Inc., will likely wait out the court case in Florida and the appeal of the Henrico County case.

"We're in a holding pattern," said Fairfax City Councilman Scott Silverthorne. "We haven't undone what we did, nor have we been asked to."

Despite threats to the contrary, Cox has rolled out high-speed Internet access in Fairfax, which is also likely to soon get digital cable, Silverthorne said.

Despite access-law worries, Cox has a more pressing problem there: aggressive marketing by DirecTV Inc. and EchoStar Communications Corp.'s Dish Network.

"Four out of nine homes on my block now have dishes," said Silverthorne. "That would not have been the case a year ago. It's the same service, and its $5 cheaper."

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