L.A., Ga. on AT&T Broadband's Mind

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The Los Angeles City Council has voted for a two-week delay of approval of
the transfer of local AT&T Broadband systems to Comcast Corp.

The delay will give city officials and cable executives time to negotiate
issues of contention.

The biggest argument is a performance guarantee. The city wants AT&T
Comcast Corp. to be the ultimate guarantor: AT&T Broadband is arguing for a
guarantee by the regional division.

In addition, AT&T Broadband
attorneys are reviewing their options after commissioners in DeKalb County, Ga.,
denied the transfer of franchise ownership to Comcast .

DeKalb County filed a lawsuit against AT&T Broadband in DeKalb County
Superior Court May 15 seeking redress for service irregularities.

County commissioners based their denial on what local regulators see as
contractual failures by AT&T Broadband.

The MSO currently serves 100,000 customers in the Georgia county. Local
officials said the number of complaint calls has been so high that consumers
have been unable to reach the cable provider by phone.

Service complaints have also been flooding the county's official Web site, which
includes a link that allows customers to tell their problems to a law
firm.

In addition to customer-service lapses, the county claimed that AT&T
Broadband has failed to meet its upgrade schedule and has neglected to meet its
institutional-network obligations.

Tim Gage, vice president of government affairs for AT&T Broadband in the
region, said local governments may only use the legal, technical and financial
guidelines of the new AT&T Comcast to determine whether to approve a
transfer.

Contractual violations are the wrong standard, according to contract and
federal law, on which to base a denial, he added.

The operator continues to address the contractual issues while analyzing
'appropriate legal steps' following the commission's July 9 vote.

The denial in DeKalb is the latest obstacle for the pending AT&T
Broadband-Comcast merger, which also has hit snags in Pittsburgh; Broward
County, Fla.; and other communities.

But for the most part, franchise transfers have received
overwhelming support, with approval in approximately 90 percent of the
communities in which they've been sought.

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