King County Reversal: OKs TCI-AT&T Transfer

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AT&T Corp. avoided another denial of its request for a
transfer of a Tele-Communications Inc. franchise by reaching an 11th hour agreement last
week with King County, Wash.

The deal sends 100,000 area TCI subscribers to AT&T,
while allowing King County to revisit the issue of whether Internet service providers
should be permitted on the @Home Network.

A decision to reopen the controversial matter may depend on
a nine-month, $200,000 study AT&T and TCI have agreed to fund that will examine
whether unbundling the high-speed cable modem platform amounts to good public policy.

"The purpose of the study is to look at this service,
because the county had been concerned that it might be anti-competitive," said TCI
spokesman Steve Kipp. "Obviously both sides will have to look at the results, which
are not binding."

In the meantime, AT&T and TCI will delay the roll out
of the @Home service in King County until the study is completed.

Once unveiled, however, the agreement places a price cap on
the service of $39.95 a month for two years.

Most importantly, the companies agreed to create a
"carriage hotel," or a connection site area ISPs can tap into to provide their
services at speeds equal to the @Home.

"It helps the performance of their service, and levels
the playing field, which is what they were concerned about," Kipp said.

The settlement came just hours before the Metro King County
Council was set to deny AT&T's request based on the company's refusal to accept equal
access terms contained in a proposed transfer ordinance sponsored by county executive Ron
Sims.

On the same day in Seattle, local officials approved a
transfer of their cable system in exchange for a series of rebates to 65,000 TCI customers
whose service has not been upgraded.

The give-backs shave $5 off the monthly bill for those
subscribers, as well as 50 cents for each month the rebuild is not completed. TCI also
must meet specific target dates on the project, or pay $100 per day, per each customer it
falls behind.

In a prepared statement, AT&T spokesman Scott Morris
said the company was "pleased that the Seattle City Council and Metro King County
Council have chosen to do what's best for customers."

"Fortunately, the two have determined that government
should not favor one segment of an industry over the innovations and technologies of
another," Morris said.

Officials in both jurisdictions were not immediately
available for comment.

However, in an interview with the Seattle
Post-Intelligencer, King county executive Ron Sims expressed annoyance that the council
had settled rather than pass an ordinance he had proposed.

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