Denver OKs TCI Franchise Transfer

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Denver -- The city of Denver last week became the latest
major local franchising authority to approve the transfer of Tele-Communications
Inc.'s cable network to AT&T Corp.

In voting unanimously to shift control over 112,000 local
TCI customers, the City Council rejected a request by area Internet-service providers that
it condition the transfer on AT&T opening @Home Network to unaffiliated ISPs.

It doing so, it voted 11-1 against an amendment offered by
Councilwoman Debra Ortega that would have required nondiscriminatory equal access to the
high-speed cable-modem platform.

"In view of the intense lobbying efforts on the part
of U S West and America Online [Inc.], we were very pleased at the unanimity with which
the council embraced the merger," TCI spokesman Matt Fleury said.

As of early last week, TCI had received 912 out of 969
authorizations from local governments that must sign off on its merger with AT&T.

But the companies remain at odds with Portland and
Multnomah counties in Oregon -- two jurisdictions that are suing over equal-access
provisions included in their transfer ordinances.

Meanwhile, proponents of opening up the Denver portion of
@Home said AT&T has gotten its way nationwide by threatening "to sue anybody who
challenges them out of existence."

"It sets a horrible precedent to let AT&T run
roughshod over people," said David Beigie, spokesman for Colorado-based regional Bell
operating company U S West, which has been touting ISP access throughout its 14-state
region. "People are applauding while AT&T remonopolizes. Only after it's too
late will they realize what's happened."

However, Dean Smits, director of the Denver Office of
Telecommunications, said the city left itself some wiggle room by insisting on a clause in
the transfer under which AT&T and TCI agreed to "comply with all lawful
requirements with respect to competitive nondiscriminatory access to the franchisee's
cable-modem platform for providers of Internet and online services."

"We feel like we haven't waived any of our
rights, and we intend to continue to monitor the situation closely," Smits said.

Theoretically, the provision gives Denver the right to
demand that @Home be opened to area ISPs if federal regulators ever rule on the issue.

At present, however, such an eventuality is unlikely,
inasmuch as the Federal Communications Commission recently declined to make the matter
part of its review of the AT&T/TCI merger.

Still, the federal government could take up the matter at a
later date.

U S West, meanwhile, hinted at what its strategy will be in
the future.

"Right now, our network has to be open to
everybody," Beigie said. "If municipalities and the FCC don't think that
it's important to have a variety of providers on this [@Home] pipe, we'll accept
that and consider it going forward as we make decisions about our own network."

Fleury said the next step is to negotiate franchise renewal
for the Denver market.

TCI's existing deal expires in June, and it must be
replaced before the MSO can complete its rebuild plans, which call for spending some $200
million locally in order to deliver a host of enhanced services, including local telephone
service over cable, Fleury said.

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