AT&T Seeks 'Competitive' Status in Conn.

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A federal judge stands by her ruling that the Connecticut Department of Public Utility Control erred when it determined Internet Protocol-delivered video products are not cable services and can't be regulated as such.

Judge Janet Bond Arterton of the U.S. District Court for the District of Connecticut issued the ruling Oct. 2, rejecting AT&T Connecticut's motion for reconsideration. The telco sought to reverse the ruling even as it was pursuing status as a competitive video provider in the state.

IPTV DIFFERENCE CITED

The case was triggered by the actions of the DPUC board in June 2006. The panel reviewed the planned U-verse TV service and agreed with AT&T that U-verse isn't a cable service, because the programming is delivered via broadband and at the demand of the consumer, not in a continuous stream.

Because the programming is delivered in bits and bytes, it is more akin to a data service, the board held, and therefore AT&T is not subject to state cable regulations, the DPUC board ruled.

The Connecticut panel has been the only regulatory body to define U-verse as anything other than a cable service.

The New England Cable & Telecommunications Association and the state's Office of Consumer Counsel challenged the decision.

On July 7, Arterton issued a summary judgment that went against AT&T and the DPUC. The judge said the DPUC was pre-empted by federal law.

Though the 1984 Cable Act describes cable service as a one-way transmission to subscribers, definitions in that federal law specifically contemplate some subscriber interaction, she concluded.

SEEMS LIKE CABLE

The fact that AT&T's customers will interact with a pool of programming is not enough to justify defining IPTV as a non-cable product, she indicated.

AT&T asked the judge to reconsider, alleging she didn't give “appropriate deference” to Federal Communications Commission rulings and other points of law, but the judge countered that AT&T's arguments “misinterpreted” her original summary judgment ruling.

The judge's ruling came one day after AT&T took advantage of a change in state franchising law and applied Oct. 1 to be certified as a “competitive video provider,” regulated by the DPUC.

Meanwhile, the state's attorney general continues to oppose treating the company any differently from incumbent cable providers.

The telco said the franchise-reform law, which took effect Oct. 1 after being passed and signed into law this summer, provides “the regulatory clarity needed for AT&T to continue its previously announced $336 million network investment and bring new choice to cable customers.” AT&T filed the franchise application about nine months after first offering U-verse TV service in Connecticut.

BLUMENTHAL SEES 'SHAM'

Connecticut Attorney General Richard Blumenthal said he will ask the DPUC to reject AT&T's franchise application because the law does not guarantee that all residents will have access to the IPTV service.

In municipalities across the country, AT&T has repeatedly argued that U-verse TV is different from traditional cable service and thus not subject to the same regulations.

“This new application by AT&T seems to accept that they must seek a franchise, but makes a sham of meeting the franchise requirements,” Blumenthal said, in a statement. “All citizens should have access [to U-verse] — not just residents of wealthy or readily served areas.”

The new Connecticut law requires a “competitive video provider” to pay the same quarterly tax on gross earnings as incumbent providers do, and provides for a three-year exemption from personal property taxes on infrastructure upgrades. Incumbent cable operators will be allowed to opt into state regulation 30 days after the entry of a new provider.

“The law taking effect [Oct. 1] provides relief to Connecticut customers who are fed up with cable prices that rose year after year in the absence of competition,” AT&T Connecticut president overseeing regulatory and external affairs Ramona Carlow said in a statement.

Under the new law, the DPUC must act on AT&T's request 30 days after notifying the company that the application is complete.

In August, Blumenthal filed an emergency petition to block AT&T from deploying U-verse TV until it had obtained a cable franchise for the IPTV service. AT&T called his petition “anti-consumer through and through.”

The DPUC rejected Blumenthal's petition on Aug. 31.

U-VERSE PENETRATION

AT&T launched U-verse TV in Connecticut last December. According to the company, it is now available to more than 135,000 homes in parts of 40 cities and towns in the state. Approximately 240 U-verse installation technicians should be employed in Connecticut by the end of 2007, according to the company.

Nationwide, AT&T asserts it averages more than 7,000 U-verse installations each week. In August the telco said U-verse TV had passed the 100,000-subscriber mark.

AT&T said last week that U-verse TV is now available to 400,000 homes in Houston, where it competes with Comcast.

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