LFAs Send Mixed Messages After Portland

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Initial reaction among local governments to an Oregon court
decision affirming their right to order equal access to cable's broadband pipe moved
along predictable lines.

While some responded by hatching plans to pursue open
access for Internet-service providers in their own jurisdictions, others warned against
overreacting to a single ruling that is undoubtedly destined for appeals court.

A U.S. District Court in Oregon recently ruled that
regulators in Portland and Multnomah counties had the authority to force AT&T
Broadband & Internet Services to open its high-speed @Home Network cable-modem
platform to outside ISPs.

The decision was a major setback for AT&T Broadband,
which is expected to appeal the ruling.

Meanwhile, it was immediately evident that the
mandatory-access controversy now threatens to spill over to AT&T Corp.'s proposed
acquisition of MediaOne Group Inc.

Tom Creighton, a Minneapolis-based attorney representing
local franchising authorities covering 55 percent of MediaOne's 300,000 area
subscribers, said the court's decision has made equal access "part of our
decision-making process."

Moreover, he added, Portland and Multnomah counties'
victory has "invigorated" some local governments.

And with most of MediaOne's area franchises up for
renewal, some LFAs feel that the upcoming negotiations -- during which communities'
future telecommunications needs must be identified -- will be the ideal time to
investigate the issue.

"At this point, the ones that understand the issue are
certainly open to it," Creighton said.

He added that local ISPs and telephony providers have
approached him about conducting seminars to educate local jurisdictions on the issue. As a
stakeholder in the debate, AT&T would also be invited to tell its side of the story,
he said.

AT&T officials conceded that cities will now be under
pressure from regional Bell operating companies and ISPs to revisit the open-access
matter. Moreover, they admitted, it will likely become an issue that will engulf the
MediaOne deal.

"I wouldn't say we weren't concerned about
that," AT&T vice president for external affairs Scott Morris said, "but we
knew that the issue of mandatory access to the cable systems would come up."

Meanwhile, reaction among other local government officials
was mixed.

In San Francisco, for example, the board of supervisors
will likely push for open access under an informal agreement with AT&T Broadband
calling for the company to unbundle its network locally if it offers open access anywhere
else.

"But it's not unconditional, and that's not
good enough," board president Tom Ammniano said. "I want more of a guarantee.
One of our options is to litigate, and I'm of the opinion that we should."

In King County, Wash., a transfer sending 100,000 former
Tele-Communications Inc. subscribers to AT&T Broadband also included a reopener clause
triggered by AT&T unbundling its network elsewhere. County executive Ron Sims said he
expects to open negotiations on equal access this fall.

"Because of the Portland decision, which comes from a
judge who is not overturned very often, we have the justification to require it,"
Sims added.

But in Denver, office of telecommunications director Dean
Smits cautioned against "overreacting" to an Oregon decision that still must be
upheld on appeal.

Smits conceded, however, that Denver's transfer
agreement with AT&T requires that the MSO comply with any appropriate Federal
Communications Commission rules or laws governing equal access.

"Bottom line: If this [Oregon decision] is lawful,
then they'll have to open it up here," he said.

Some, however, remained convinced that Washington, D.C.,
was the best-suited venue to decide the matter.

"It's a critical issue, but it's best
resolved on a national level," said Mario Goderich, director of the Consumer
Protection Division in Dade County, Fla. County officials have included their views in a
letter to FCC chairman William Kennard.

"Hopefully, they'll act. This [decision] should
provide the impetus to the FCC to convince them that they should lead on this issue,
Goderich added.

At last week's National Show, however, Kennard
indicated that cable operators should be allowed to offer high-speed-data services without
any local regulation.

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