ACCESS WOES MOUNT

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A second community has mandated that cable open its
high-speed-data platform to competitors, prompting threats of new lawsuits from the
highest echelon of AT&T Corp., the target of the most competitive stress.

The Board of Supervisors of Broward County, Fla., narrowly
approved an open-access ordinance by a 4-3 vote. The local ordinance amends
telecommunications-licensing policy and requires cable operators to allow access to
competitive Internet-service providers under terms and conditions equal to those offered
to operators' own affiliated companies.

The board brought up the issue in May, but it delayed a
final vote while further research was done on the issue. But the majority, including
chairwoman Ilene Lieberman, made it clear then that they supported public policy that
lowered barriers between consumers and emerging technologies.

Broward County's dominant operator is MediaOne Group
Inc., which will be acquired by AT&T's AT&T Broadband & Internet Services
unit. AT&T Broadband battled the ordinance with thousands of dollars worth of ads in
an effort to rally support against it.

The apparent big winner this time is GTE Corp., which
supports open access. The telco, which owns some cable systems, only does business in the
county as an ISP. GTE promised to reimburse the county's legal fees if the regulation
is challenged.

After the vote, AT&T regional vice president for
legislative and governmental affairs Ken McNeely issued a statement branding the ordinance
"wrong on the law and bad policy." He predicted that it would "discourage
investment" in technology in the county.

McNeely's boss, AT&T chairman C. Michael
Armstrong, also vowed to appeal during testimony at a Senate Judiciary Committee hearing
last Wednesday.

Local officials in Portland, Ore., were predictably
delighted to finally have an ally in the fight with AT&T, projecting that
"there's more coming as the year goes on."

"Thank God. It's been lonely," said
cable-franchising director David Olson, who also heads the Mount Hood Cable Regulatory
Commission. Mount Hood triggered the open-access controversy when it advised Portland and
Multnomah counties to make access a condition for transferring former Tele-Communications
Inc. franchises to AT&T.

"We think the four Broward County commissioners were
very, very brave to step up and do the right thing in the face of an enormously well
organized and funded campaign by AT&T," Olson added

He said other local franchising authorities could join the
fight by voting to require open access in their communities when transferring MediaOne
systems to buyer AT&T.

Or, he added, LFAs could file friend-of-the-court briefs
with the Ninth Circuit Court of Appeals -- the venue for AT&T's appeal of a
lower-court decision upholding Portland and Multnomah counties' right to require
unbundling.

McNeely again cited remarks made at the National Show last
month by Federal Communications Commission chairman William Kennard.

The chairman cheered cable interests by declaring that
local regulation of broadband access would lead to "chaos." Kennard also invited
the cable industry to request that a docket be opened on the topic -- an invitation that
cable shows no sign of accepting because it likes Kennard's hands-off approach.

"If [cable operators] ask the FCC to pre-empt cities,
then they're admitting that the FCC has the authority," Olson said. "And if
[the FCC has] the authority, we have the authority, because the Cable Act clearly states
that the locals have the right to impose conditions encouraging competition."

During the a telephone press conference on the Broward
vote, OpenNet Coalition co-director Greg Simon claimed that the city of Seattle will
revisit the equal-access issue.

That was news to Steve Holmes, director of the Seattle
Office of Cable Communications. Even though the city has a reopener clause in its transfer
agreement with AT&T, Holmes said city officials were basically happy with the
arrangement.

Elsewhere, support for open access may not be so great in
the Minneapolis-St. Paul, Minn., area, where many MediaOne systems are up for franchise
renewal.

Tom Creighton, a Minneapolis-based attorney whose municipal
clients represent more than one-half of MediaOne's 300,000 area subscribers, said the
issue would be raised during the transfer process, but he felt that no one was "ready
to go to the mat on this one."

"I'm not recommending that any of my clients make
it an issue," he added. "It feels like a Trojan horse to me. And I don't
like some of the allies we'd have to make to push this issue. I haven't figured
out all of their motives."

Still, pro-access forces were elated that Broward has
joined Portland in stepping up to protect local regulatory rights.

"This is a tremendous victory for all ISPs. If the
vote failed, it would have definitely put us out of business. We would sell our equipment
now and get the pain over early," said Robert Palucci, founder of Worldwide Internet
Technologies Corp., a Broward-based ISP and OpenNet member.

Coalition officials noted that the first-round court
victory by Portland to attempt to open the data platform to competition has spurred the
growth of OpenNet. The lobbying group has doubled in size in the five weeks since the
Portland legal decision was announced. Now, 166 ISPs -- ranging in size from America
Online Inc., MCI WorldCom Inc. and Gateway 2000 to tiny rural mom-and-pop shops -- have
joined to promote open access.

One company that is unlikely to join OpenNet's ranks
is Internet Ventures Inc., which has approached competitive access in its own way.

IVI is seeking FCC support for its attempt to gain access
to the data platform under cable's leased-access rules. OpenNet did not file
documents in support of IVI's petition, and OpenNet member GTE filed negative
comments.

Consumer support for competitive access is growing, too,
OpenNet asserted, citing a poll conducted on its behalf of consumers in communities where
open-access regulation is contemplated, including San Francisco and Los Angeles.

The former will discuss its regulatory plans July 27, and a
Los Angeles City Council committee has just scheduled yet another public hearing on the
issue.

According to the poll, six out of 10 consumers think
it's "unfair for the cable industry to monopolize broadband access to the
Internet."

Open access also surfaced in a State Senate bill in
California last week, but it was not subjected to a vote in committee.

AT&T may have made a political misstep in that
situation: When the Assembly Utilities and Commerce Committee failed to vote on an
open-access bill last week, AT&T issued a press release lauding a victory against
Internet regulation.

The failure of the committee to vote on Senate Bill 1217
showed that there is no support by legislators for regulation at this time, according to
AT&T's statement.

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