Access-Leader Portland Draws Cable Rivals

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By year's end, Portland, Ore., may have two new cable
providers vying for a share of a local video market dominated by AT&T Broadband &
Internet Services.

The Mt. Hood (Oregon) Cable Regulatory Commission took the
next step last week by voting 6-0 to negotiate a franchise with RCN Corp., which is moving
into the Pacific Northwest on a wave of cash furnished by Microsoft Corp. cofounder Paul
Allen.

"We're off and running in Portland," RCN
senior vice president Scott Burnside said, following a presentation to the MHCRC.

Armed with Allen's $1.65 billion investment, RCN is
also targeting Seattle, which will be asked to embrace its plan to enter the market via an
open-video-system license recently issued by the Federal Communications Commission.

"[Seattle] has said, 'Welcome, here's our
franchise, call us for an appointment,'" Burnside said.

In Portland, meanwhile, RCN wasted no time getting started,
sitting down to a three-hour negotiating session the morning after the commission
green-lighted the talks.

"They want to fast-track this," MHCRC director
David Olson said. "We're looking at writing one of these franchises in four
weeks, where ordinarily, it takes months. We're talking a world's record."

Burnside said RCN hopes to have a deal approved by the
six-member MHCRC within three months, which would allow it to begin serving residential
customers by the end of the year.

RCN is looking to join Denver-based WideOpenWest LLC as the
latest overbuilder to compete against AT&T Broadband for the 750,000 residents of
Portland, Multnomah County, Gresham, Wood Village, Troutsdale and Fairview, Ore.

Both companies agreed to abide by Portland's
open-access ordinance -- a controversial requirement that AT&T Broadband is fighting
in the Ninth Circuit Court of Appeals.

Olson said negotiations are running about one month ahead
with WideOpenWest, which has questioned whether the local market can support three service
providers.

AT&T Broadband has indicated that the arrival of
competition in Portland won't alter its stance on open access, and that it expects to
prevail at the Ninth Circuit.

In the meantime, the MSO has declined to roll out its
AT&T@Home high-speed-data service in Portland. That's unlikely to give RCN and
WideOpenWest a competitive edge, though, since the court is expected to act before they
can get their networks built.

During the MHCRC meeting last week, RCN officials outlined
plans for an 860- megahertz, fiber-optic network capable of delivering residential cable,
high-speed Internet and telephony services.

In Seattle, cable director Steve Holmes said WideOpenWest
has also approached the city. Although characterizing talks as "preliminary," he
noted, "Speed to market is apparently very important."

Seattle already has a second player in the market in the
form of Millennium Digital Media, which is offering service to 80,000 AT&T Broadband
cable subscribers. "It's getting crowded out there," Holmes said.

Elsewhere, the Telecommunications Commission for the city
and county of San Francisco gave unanimous support last week to a staff report advocating
open access in the region.

Rather than opting for a wait-and-see policy or ordering
open access now, the agency approved a resolution demanding that all high-speed-data
platforms be open by Jan. 1, 2003.

The staff report advocated a policy that would allow
Internet users to access desired content without having to navigate material proprietary
to the platform owner. It would also require universal access, equal treatment of Internet
traffic and access for people with disabilities.

The recommendation now goes to the Board of Supervisors.
Its president, Tom Ammiano, has been an outspoken supporter of open access. The issue
should be set for discussion by the public utilities and deregulation committee Feb. 15,
according to city staff members.

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