Cities Sense AT&T Slowdown

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AT&T Broadband denied that its system upgrades have been lagging while
capital-spending budgets are reviewed.

But officials in some cities reported being informed that AT&T
Broadband's construction budgets are now scrutinized on a quarterly basis,
resulting in a slowing of upgrade projects.

In Wheaton, Ill., where an upgrade of the 13,000-subscriber system was
halfway done, an AT&T Broadband executive told a local official construction
had stopped.

'`AT&T has no capital at this time,'' Wheaton media manager Gary White
said, quoting the MSO representative.

White said another AT&T Broadband executive told him funds for the
upgrade in the community 25 miles west of Chicago might be reallocated by the
second quarter. 'But I'm taking whatever they say with a grain of salt,' he
added. 'It seems like we've been led on. Right now, there's a bad taste in
everybody's mouth.'

In Denver, meanwhile, officials had noticed that a $200 million upgrade of
AT&T Broadband's 116,000-subscriber system had slowed in recent weeks.

'I was unofficially informed this week that construction budgets are now
reviewed quarterly, and that may or may not impact the upgrade schedule,' said
Dean Smits, director of the Denver Office of Telecommunications.

AT&T Broadband officials said upgrades were not on hold in the
communities surrounding Chicago. Instead, a change had been made in the local
organizational structure calling for a more 'methodical' approach to the
projects.

'It's much more efficient, and it will allow us to use our manpower better,'
AT&T Broadband vice president of communications Pat Andrews-Keenan said.
'But by no means are these communities not scheduled for upgrades.'

Andrews-Keenan said the Chicago-area upgrades are a massive project that
began in the mid-1990s and grew even more complex as the acquisitions of local
MediaOne Group Inc. and Prime Cable properties were completed.

'That's not what I was told,' White answered.

Multichannel News was unable to locate another community in the Chicago
area that had been told its upgrade was being shut down.

But in nearby Naperville, officials reported 'rumbling from other communities
that have AT&T as a provider.'

AT&T Broadband corporate spokesman Steve Lang said the company's plans to
concentrate on increasing penetration in already upgraded areas may give the
impression that upgrades have slowed.

'[A total of] 75 percent of our plant is already two-way,' Lang added.
'There's a lot of plant that we can connect and start marketing
to.'

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