9th Circuit Ruling Has Many Appealing

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Cable operators have used a 9th U.S. Circuit Court of Appeals decision from last June to reject open access, then to question franchise-fee payments on revenue from high-speed data service.

And now that ruling has been cited in a pole-attachment battle between a Top 20 MSO and a small utility district in California's Lake Tahoe region.

USA Media Group has cited the 9th District ruling in both a federal lawsuit and a Federal Communications Commission petition challenging policy changes on pole attachments by the Truckee Donner Public Utility District. The June court ruling handed AT & T Broadband a victory in its open-access battle with Portland, Ore., franchising authorities.

The 9th District ruling changed the way cable-modem service is classified under federal law, at least in the Western states governed by its decisions-including California. Data-over-cable had been generally considered a cable service, but the decision altered that definition and termed it a telecommunications product.

Under that definition, USA Media argues, a competing company-such as the utility district-can do nothing that constitutes a barrier to entry for a new-service provider.

USA Media operates an 11,400-subscriber system in the Truckee area on Lake Tahoe's north shore. The operator has deployed digital video and would like to rewire the system with optical fiber in order to offer both its USA@Home high-speed data service and telephony to consumers.

According to FCC pleadings, the company intends to "overlash" its current copper plant with fiber, using current pole attachments. USA Media believes that construction is covered by the license it has held with the utility since 1965.

But the utility apparently has its own telephony aspirations. Truckee Donner is currently a customer-owned water and electricity provider with 10,000 electric customers in more than a dozen small communities. Published reports indicate the utility is examining expansion into data services and other products.

USA Media asserts the utility wants pole-attachment terms that are different than those its own telecommunications services would enjoy. That difference would constitute an entry barrier of the sort barred by the 9th Circuit decision.

USA Media has also filed suit in U.S. District Court in Sacramento to challenge the utility policies.

Roger Terneuzen, USA Media's director of operations, confirmed the dispute but declined comment on the pending litigation. He said only that until the attempt to deploy fiber, relations between the cable operator and utility were amicable.

The cable operator is proceeding with fiber-optic deployments where it can. Part of the plant is attached to poles owned by Pacific Bell, a division of SBC Communications Inc., he said. Fiber-optic plant has been deployed on that infrastructure.

Peter Holzmeister, the utility's general manager, did not return calls for comment.

The FCC is collecting comments on the challenge until Jan. 29. The federal lawsuit is still in the discovery phase, Terneuzen said.