News

Ga. County Denies Comcast Transfer

7/21/2002 8:00 PM Eastern

AT&T Broadband attorneys are reviewing their options after DeKalb County, Ga., commissioners denied the transfer of franchise ownership to Comcast Corp.

DeKalb County filed a lawsuit against AT&T Broadband in DeKalb County Superior Court on May 15, seeking redress for service irregularities.

County commissioners based their denial on what local regulators see as contractual failures by AT&T Broadband.

The MSO currently serves 100,000 customers in the Georgia county. Local officials said that number of complaint calls has been so high that consumers have been unable to reach the cable provider by phone. Service complaints have also been flooding the county's official Web site, which includes a link that allows customers to tell their problems to a law firm.

In addition to customer-service lapses, the county claims AT&T Broadband has failed to meet its upgrade schedule and has neglected to meet its institutional-network obligations.

Tim Gage, vice president of government affairs for AT&T Broadband in the region, said local governments may only use the legal, technical and financial guidelines of the new AT&T Comcast to determine whether to approve a transfer. Contractual violations are the wrong standard, according to contract and federal law, on which to base a denial, he said.

The operator continues to address the contractual issues while analyzing "appropriate legal steps" following the commissions July 9 vote.

The denial in DeKalb is the latest obstacle for the pending AT&T Broadband-Comcast merger, which also has hit snags in Pittsburgh; Broward County, Fla.; and other communities. But, for the most part, franchise transfers have received overwhelming support, with approval in approximately 90 percent of the communities in which they've been sought.

All of the other county jurisdictions in the company's Atlanta cluster, including Fulton, Cobb, Gwinnet, Clayton, Fayette, Douglas and Rockdale have voted to approve the merger.

It appeared the transfer would be challenged in the city of Atlanta based on consumer demand for senior citizen discounts. But on July 15, the council there voted unanimously to approve the transfer.

Gage said AT&T convinced the Atlanta council that it was inappropriate to take up the issue during a transfer proceeding.

But AT&T has agreed to try to negotiate a deal with the city's Housing Authority to reduce rates for residents in 19 city subsidized senior citizen apartment buildings. Residents there currently subscribe and pay individual rates. A bulk subscription for apartments would lower rates to the individual residents.

The transfer also got final approval in Boston, with conditions.

AT&T Broadband previously agreed to cut the monthly rate on its 20-channel basic service by $1.75; maintain that rate through 2002; and cap annual rate increases at 6.5 percent through 2008.

But city officials were still dissatisfied, citing a slow local plant upgrade. Only half of the community has been upgraded to digital, a project that was supposed to be completed last September.

AT&T Broadband negotiated an extension on the build-out to June 30 next year. Failing to meet that deadline would mean possible penalties of $1,000 per day, up from the current $500.

By the end of 2003 there must be in place a fiber-optic network among 260 schools, libraries, community and police and fire stations.

The city hopes to use this network as a low-cost telephony option to service from Verizon Communications.

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