News

Minnesota OKs AT&T-MediaOne Transfer

12/19/1999 7:00 PM Eastern

Minnesota regulators have approved AT&T Corp.'s
acquisition of MediaOne Group Inc.'s local operations, but they will still look at
requiring open access down the road.

The Public Utilities Commission voted unanimously recently
to OK the merger, which gives AT&T Broadband & Internet Services 330,000 MediaOne
customers in the Twin Cities, or 65 percent of the market.

Minnesota is the sixth state to approve the deal between
the two telecommunications giants, joining Florida, Massachusetts, New Hampshire, Georgia
and Michigan.

But the PUC also said it will open a docket next year on
whether it can order AT&T to open its high-speed platform to outside Internet-service
providers.

The commission has asked an administrative law judge with
the Minnesota Office of Administrative Hearings to review the open-access question. His
report is due June 1, PUC spokesman Mark Oberlander said.

The idea of separating its merger deliberations from open
access was originally floated by the companies, the Minnesota Department of Commerce and
the state's Attorney General's Office.

AT&T has agreed not to raise jurisdictional issues
during the PUC's review, which will include the DOC's argument that Internet access
delivered over cable is a telecommunications service and, therefore, equally subject to
the common-carrier requirements imposed on the regional Bell operating companies.

For now, though, AT&T's problems in Minnesota have been
resolved. It has already received transfer approval from 88 of its 89 local franchising
authorities in the state.

"By giving AT&T and MediaOne the green light to
move forward with the merger, the commission has demonstrated its foresight to create an
environment conducive to competition, especially for local telephone service,"
AT&T vice president of government affairs Charles Ward said.

Access proponents agreed that reviewing the unbundling
question separately from the merger agreement gives them "one less thing to worry
about."

Moreover, they believe AT&T has hurt its chances before
the PUC with a proposal to the Federal Communications Commission outlining how it will
allow unaffiliated ISPs onto its network once its exclusive deal with Excite@Home Corp.
expires.

"AT&T has always said that open access was not
technically feasible," said Bil MacLeslie, head of research development for Vector
Internet Services Inc.'s VISI.com, an area ISP. "But now it says it is technically
feasible. That is going to give us more ammunition."

The PUC has been under pressure from a coalition of local
ISPs that wanted the agency to delay the transfer of a certificate allowing MediaOne to
offer local phone service in the Twin Cities unless AT&T agreed to unbundle the
high-speed broadband network.

Ward said a separate review of the access question is
likely to result from the PUC ruling against regulation of the Internet.

"We're confident that the PUC will act as other
regulatory bodies have acted after examining the issue in detail," he added. Every
regulatory body in the country that has fully investigated the issue has uniformly
rejected the notion of forced access."

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