AT&T Kills $75 HDTV Access Fee

10/30/2002 2:39 AM Eastern

AT&T Broadband has decided to kill a controversial $75 access fee that it
had planned to charge premium high-definition-TV subscribers in Seattle, the
second market where the cable company is offering HDTV.

'The Seattle launch is still going ahead, but without the fee,' AT&T
Broadband spokeswoman Tracy Baumgartner said.

The MSO introduced HDTV in Chicago in May with a set-top fee but with no
access fee or additional programming charge.

Since April, Federal Communications Commission chairman Michael Powell has
been leaning on the cable industry and other industries to expose consumers to
HDTV in a financially friendly fashion.

When word of AT&T Broadband's access charge hit the FCC, the reaction was
decidedly negative, with one agency source calling it 'outrageous' and 'a stupid
thing to do.'

Another FCC source, asking not to be identified, also expressed surprise at
AT&T Broadband's move, given Powell's close attention to the digital
transition and his emphasis on HDTV programming.

AT&T Broadband said Tuesday that it was rolling out HDTV to 850,000
Seattle-area homes Oct. 30, initially offering Home Box Office and Showtime.
Local TV stations would be added in a few months, the company said.

Under the operator's HDTV plan, a customer would need to subscribe to basic
cable and digital cable, as well as HBO and Showtime, to qualify to receive HBO
and Showtime in HDTV.

Although AT&T Broadband isn't collecting a monthly HDTV-programming fee,
the company intended to charge a one-time $75 HDTV 'access charge' and to
collect $4.80 per month for an HDTV sidecar converter.

Early Wednesday, AT&T Broadband spokesman Steve Kipp called the $75 HDTV
charge 'a one-time fee for the provisioning for nonregulated services.'

Later in the day, Baumgartner said the company had been struggling to come up
with HDTV-access-fee models that fairly reflected HDTV's burden on channel

'We haven't figured out how to price this bandwidth-intensive and complex
service,' she said. 'We are planning to take more time to think through the
concept of access fees.'

AT&T Broadband, Kipp said, never planned to charge any access fee for
local TV stations carried in HDTV. Nor would customers be required to purchase
the digital tier or premium networks to receive local HDTV signals.

'When we get to the local channels, we would not charge this fee. And you
would not need to have digital cable,' he added.

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