Cambridge Dings AT&T Over Access

11/14/1999 7:00 PM Eastern

As expected, the city of Cambridge, Mass., joined the
open-access wars last week by rejecting AT&T Corp.'s request for a transfer of
MediaOne Group Inc.'s cable license.

City manager Robert W. Healy based the denial on
AT&T's refusal to find a spot on its broadband network for unaffiliated
Internet-service providers, as well as on alleged noncompliance issues involving the
existing license.

"We don't believe a transfer of the cable license
from MediaOne to AT&T would be in the public interest," said Healy, who had until
last Thursday to issue a decision.

Cambridge is the fourth local franchising authority to
require open access -- or what opponents called "forced access" -- of AT&T,
joining Oregon's Portland and Multnomah counties and Broward County, Fla. A fifth
LFA, Fairfax, Va., has imposed the requirement on Cox Communications Inc.

But unlike those venues, Healy went one step further by
concluding that AT&T lacked the expertise to operate MediaOne's 21,000-subscriber
system in Cambridge, arguing that the company "has only been in the cable-television
business since it purchased TCI [Tele-Communications Inc.] earlier this year."

"The issuing authority does not believe that this
constitutes adequate management experience for the transferee itself to assume control of
the Cambridge cable-television system," Healy wrote in a five-page letter delivered
to AT&T.

He also offered a laundry list of noncompliance issues,
including MediaOne's failure to build and maintain an institutional network; not
complying with employment, procurement, staffing and reporting requirements; and charging
the local-access corporation $18,575 to reconnect to its headend in order to have
cablecasting capability.

Given MediaOne's failure to meet its license
requirements and AT&T's plans to keep existing management at the Cambridge
system, AT&T "is not likely to adhere to the terms and conditions of the final
license, as required," Healy concluded.

"The city manager simply doesn't think it's
in the city's interest to transfer a noncompliant license," Healy assistant Lisa
Peterson said.

Healy's letter, however, left little doubt that
AT&T's refusal to accept compulsory access was the prime reason behind his
decision. "Without such a requirement, AT&T's power to constrict access to
its broadband network threatens the Internet's open end-to-end architecture," he

MediaOne offers Road Runner Internet service to some 5,000
customers in Cambridge.

MSO officials were studying their options last week --
which include an appeal to the Massachusetts Department of Transportation and Energy, or a
lawsuit -- spokesman Rick Jenkinson said.

The DTE has declared that LFAs cannot make open access part
of their transfer reviews -- an opinion that was mirrored by a report issued by a special
magistrate appointed by the agency.

Jenkinson took issue with the noncompliance argument raised
by Healy, noting that grievances are part of ongoing negotiations for a license renewal in
Cambridge. "But, as usual, they're mixing up the transfer with the
renewal," he said. "And noncompliance issues can be resolved by whomever has the

In a prepared statement, the National Cable Television
Association said it was disappointed that Cambridge joined a handful of LFAs "that
have chosen the course of unlawful regulation, which will only chill broadband investment
and slow deployment of high-speed services to consumers."

Meanwhile, the open-access question popped up in two other
MediaOne venues in Massachusetts last week, with opposite results.

One community that access supporters had counted as a
"win" reversed itself and moved into the "loss" column when Weymouth,
Mass., did an about-face and voted 3-0 to send MediaOne's franchise to AT&T,
minus a previously authorized access provision.

Key to the reversal was the Nov. 2 biennial election, where
municipal leadership shifted to newly elected Mayor David Madden, an opponent of
open-access policy. Meanwhile, sources said, lobbyists for both sides bombarded town

Because of the changing atmosphere, the town's
selectmen voted unanimously to reverse their previous edict.

"We're confident that when more communities look
past the 'open-access' sound bite, they'll realize that forcing access to
our cable networks will benefit our competitors, and not consumers," MediaOne vice
president and counsel Bartlett Leber said in a prepared statement.

MediaOne will challenge another Massachusetts town, North
Andover, even though the action it took last week does not immediately unbundle the
company's network. Instead, it requires a reopener in the new AT&T franchise. The
DTE recently denied North Andover's request for a waiver that would have allowed it
to make open access part of its transfer deliberations.

Elsewhere, AT&T's lobbyists outgunned access
proponents in other jurisdictions last week.

Officials in Richmond, Va. -- where the mayor inserted an
open-access motion into a traditional transfer document submitted by the city manager --
voted for a transfer without the access stipulation. Other heavily lobbied communities
also went cable's way, including Fresno and Madera County, Calif.

Comcast Corp. benefited in Sacramento, Calif., from
heavy-handed lobbying by Pacific Bell, one regulator said. No transfer is even pending in
the community, although there are rumors of a system swap with AT&T Broadband &
Internet Services.

"Pacific Bell tried to make this about open
access," said Rich Esposto, executive director of the commission, which responded by
rejecting the discussion, 9-0.

As the issue continues to ignite in cities across the
country, Deborah Lathen, head of the Federal Communications Commission's Cable
Services Bureau, was out preaching the gospel of "digital forbearance."

In a speech before "Town Hall LA," Lathen urged
local lawmakers to "let the marketplace take us there. Our policy of vigilant
restraint has set the proper path."

After Lathen's speech, a staffer from the city of
Santa Monica, Calif., said that community will hold hearings on the access question when
it considers transferring its Century Communications Corp. franchise to Adelphia
Communications Corp. later this year.

Meanwhile, a sixth access battlefield was looming in St.
Louis last week, where Mayor Clarence Harmon was expected to sign an ordinance opening
AT&T's local network to outside ISPs.

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