AT&T Broadband, Jacksonville in Scrap

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The Jacksonville (Fla.) City Council has taken the first step to refuse the
transfer of AT&T Broadband's franchise to Comcast Corp. and to revoke
AT&T Broadband's franchise in the community.

AT&T Broadband reacted immediately, publicly threatening a protracted
legal fight if the city finalizes its actions.

Although the dispute originally centered on customer-service failings to
north Florida's approximately 250,000 customers, the revocation now links to an
outside issue -- a consumer class-action suit.

Ellen Filipiak, senior vice president for AT&T Broadband in Florida, said
the parties had an agreement in principal that would have accelerated the
rebuild of the system and given consumers about $2 million in direct
rebates.

But the agreement has fallen apart with the operator's insistence that
Jacksonville 'remain neutral' in a local class-action lawsuit alleging breach of
contract, overcharging and falsified performance reports by the operator.

AT&T Broadband executives said the class-action lawsuit is a separate
issue from the Jacksonville negotiations, yet they stated that they will agree
to nothing that will hamper the company's ability to fight the outside
lawsuit.

Matt Leibowitz, special counsel for the city, said Jacksonville officials
have been 'clear and consistent' that whatever agreement is reached to resolve
customer-service deficiencies would not be used as a bar or defense against the
class action.

The City Council introduced an ordinance Tuesday to revoke the franchise for
MediaOne of Greater Florida Inc., as the system is still legally known. A second
vote, scheduled in November, is required to finalize the
action.

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