Cities Use AT&T Transfer to Press Issues

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While some cities will introduce new issues, such as open
access to cable-modem platforms, during transfer talks with Tele-Communications Inc. and
AT&T Corp., others will seize the opportunity to resolve old issues.

Take the case of Antioch, Calif., a town a few minutes east
of San Francisco with a population of 75,000. Officials there said they have been in
"bureaucratic limbo" for years over a contract obligation that requires its
cable operator, which is now TCI, to offer discounts to senior citizens.

The original operator, Viacom Cable, had agreed in its
franchise to offer discounts to residents older than 62 with incomes of $24,000 or less.
The operator could only raise its rates by 50 cents per year to those qualified customers.

However, according to Antioch city attorney Bill Galston,
Viacom claimed that after the passage of the 1992 Cable Act, the senior rates became
illegal.

Indeed, Section 623 of the act requires that an operator
offer a uniform rate structure throughout its demographic area. However, the act also
states that there is nothing that a federal, state or local franchising authority can do
to prohibit an operator from giving reasonable discounts to seniors or other economically
disadvantaged subscribers.

When TCI took over the system in 1996, it eliminated the
senior rate.

The city filed suit in state court to enforce the
franchise; the judge deferred on the matter to the Federal Communications Commission.

A 1997 citizens' suit failed when a court ruled that
it cited an inapplicable state law.

Galston said FCC staff members have advised him that the
discounts are not illegal -- an assertion that Morgan Broman, spokesman for the
commission's Cable Services Bureau, repeated to Multichannel News. Broman
added that enforcement is "not an FCC thing ... it depends more on state and local
laws."

TCI's transfer will be subjected to a vote Tuesday
(Jan. 26). City officials intend to "get the new carrier to abide by our
senior-rate" order, Galston said.

The issue of an upgrade may complicate the transfer and
subsequent renewal in Pittsburgh. The City Council there has aspirations to make the area
an East Coast Silicon Valley.

The city commissioned a study by consultancy The Hill Group
and Carnegie-Mellon University. The study recommended, among other things, that regulators
"strive to capture a more advanced service agreement" from telecommunications
providers.

Although officials didn't say specifically what they
would ask of TCI-AT&T, Pittsburgh's assistant solicitor, Rodney Akers, noted that
the transfer talks will be followed in October by the expiration of the current cable
franchise.

TCI has improved its systems ringing Pittsburgh, but the
urban core is still wired with dual-330-megahertz plant. The parties are in informal
negotiations now, and Akers hopes that TCI will propose an upgrade.

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