The 9th U.S. Circuit Court of Appeals ruling could hold up several current franchise-transfer-related open-access measures.
For example, 10 municipal governments in North Carolina approved the merger of America Online Inc. and Time Warner Inc.-but only if the cable operator accepts open-access language written into the franchise-transfer agreement.
Late last week, the court ruled that Portland, Ore., was barred by federal law from using a transfer to force AT & T Corp. to open its high-speed-data network to unaffiliated providers. Before that ruling came down, a consultant for the 10 North Carolina municipalities said another 11 local governments in the same coalition were also considering that language.
But the consultant, Bob Sepe, said the appeals court ruling-though not specifically directed at municipalities outside of that West Coast court's jurisdiction-could prompt his clients to rethink the access measures. Sepe said he planned to meet with those officials to discuss the ruling.
The North Carolina communities gave Time Warner 30 days to accept or reject the proposals.
"We're clearly not going to accept those kinds of terms and conditions," Mike Luftman, vice president of corporate communications for Time Warner Cable, responded last week prior to the Portland decision.
Luftman noted that local franchising authorities that represent 80 percent of the company's subscriber base had already approved the transfer without conditions.
Sepe said the language adopted in North Carolina merely codified AOL and Time Warner Inc. executives' public pledge to open their high-speed data platform in the future.
The language in the North Carolina agreements states that the operator will provide non-discriminatory access to the cable-modem platform to online providers whether or not they are affiliated with Time Warner.
"The position of the local governments is: If this is your position in the [pledge], why is this a problem?" said Sepe, formerly the cable regulator for the city of Raleigh and now a consultant.
The local governments began approving the conditional transfer language beginning on June 5. Those that have approved the transfer so far are Chatham County, Knightdale, Holly Springs, Smithfield, Oxford, Hillsborough, Windell, Morrisville (home to a large commercial research park), Carrboro, Wake Forest, N.C., and Wilson. Eleven more will take up the issue by July 18.
Sepe said open access is perceived as vital to these communities because "it's not likely competition will come to these places any time this century."
But while cable competition is unlikely, the region is home to a nascent mini-Silicon Valley. Carrboro is particularly identified as an incubator for high-tech products.
Regulators in those cities are concerned when they hear Internet-server and router manufacturers tell the cable industry how their equipment can be used to "throttle down" content, thus reducing its bandwidth allocation.
Elsewhere on the local-access front, regulators in Montgomery County, Md., are looking at access as they consider the transfer of Cable TV Montgomery to Comcast Corp. There was no firm access proposal on the table there, however.
Cable lobbyists last week also scored a victory in Michigan against an access bill backed by Ameritech Corp. and GTE Corp.
Instead of approving a bill this session, the Michigan Legislature directed the state's Public Service Commission to study the issue, killing any chance for legislation this year.