OPEN-ACCESS CARD GROWS

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AT&T Corp. will need a "small miracle" to
prevent St. Louis from becoming the fifth local jurisdiction to adopt an open-access
policy, company officials conceded last week.

And MediaOne Group Inc., which is merging with AT&T,
has to deal with the fact that Cambridge, Mass., may become the sixth community to take on
cable over the access question.

In St. Louis, the Board of Aldermen will meet this Friday
(Oct. 29) to consider enacting a rapidly moving ordinance requiring AT&T Broadband
& Internet Services to allow unaffiliated Internet-service providers to piggyback on
its local network.

"This is being pushed through very quickly,"
AT&T spokeswoman Deb Seidel said. "We knew we were fighting an uphill battle, but
it's a battle that has to be fought."

Cambridge city manager Robert W. Healy, who has sole
authority over local franchising, said last week that MediaOne must agree to unbundle Road
Runner service before the city will transfer its system to AT&T.

MediaOne operates a 21,000-subscriber system in Cambridge,
not counting 5,000 Road Runner customers. Healy dispatched a letter to AT&T announcing
his intentions and giving the company until Wednesday (Oct. 27) to respond.

MediaOne officials said it was premature to comment until
the city officially takes action. "But [Healy] has said that he's willing to
talk, and that negotiations are possible, so the fat lady hasn't sung on this one
yet," spokesman Rick Jenkinson said.

However, Cambridge public-information officer Ini Tomeu
said, "Something will happen soon," since the city only has until Nov. 11 to act
on MediaOne's transfer request.

Cambridge would be the second Massachusetts community to
jump on the access bandwagon. Somerville, Mass., another Boston-area city, has asked the
Federal Communications Commission to decide whether cities have the right to unbundle
cable operators' networks.

In a prepared statement, The National Cable Television
Association said it was "disappointed" that Cambridge had not joined
"hundreds" of local franchising authorities that have "voted in favor of a
competitive marketplace, not government regulation."

The St. Louis ordinance could make already tricky
franchise-renewal talks on the company's 55,000-subscriber system in metro St. Louis
even more complicated.

Once enacted, AT&T would have to unbundle its local
network if it decides to upgrade its system in order to offer high-speed Internet access
in St. Louis.

Another option would be suing the city, as it has with two
other communities with open-access requirements. Company executives declined to discuss
the possibility last week.

The Board of Alderman was scheduled to meet last Friday
(Oct. 22) for the so-called perfection process that puts a bill in its final form. Once
perfected, a bill cannot be amended, which would allow the 29-person board to hold a final
vote on the open-access ordinance as early as this week.

"I think there are 15 votes out there," board
president Francis Slay said, noting that 17 alderman are co-sponsoring his bill. "We
expect to perfect it. We expect final passage."

Meanwhile, AT&T suffered another setback when St. Louis
Mayor Clarence Harmon dispatched a letter to a recent board meeting endorsing the Slay
ordinance. Harmon was traveling abroad last week and unavailable for comment.

"[Harmon] made his decision without any input from
us," Seidel said. "If he studied the issue, he didn't have any contact with
us."

Seidel said revisions to the bill -- one removing a clause
allowing ISPs to sue AT&T if it does not comply with the ordinance, and another making
the measure effective upon passage, rather than in the typical 90 days -- were not enough
to mollify AT&T.

Experts said pushing open access during the renewal process
gives the city more leverage. Theoretically, it could threaten to invoke a provision in
the amended 1934 Communications Act that allows a community to deny a renewal if the
operator's proposal fails to meet the community's presumed telecommunications
needs.

"This will be challenged," Paul Kagan Associates
Inc. regulatory analyst John Mansell said. "The question is going to be: Can you
subject a cable operator to more onerous obligations than even the incumbent
local-exchange carrier?"

Others, though, said St. Louis was approaching the issue
from the most logical angle.

The four communities with existing open-access requirements
-- Oregon's Portland and Multnomah counties, as well as Broward County, Fla., and
Fairfax, Va. -- have all acted during the transfer process, when cities are limited in
what they can demand.

"But it's more appropriate to [pursue open
access] during the renewal process. As a Title VI service, Internet access falls within
the city's right to establish what the community's telecommunications needs
are," said an industry observer, who asked for anonymity.

AT&T believes the Slay proposal was written by SBC
Communications Inc.'s Southwestern Bell unit as a reaction to an FCC order that
relieves regional Bell operating companies from having to unbundle digital-subscriber-line
service.

"If you look, the DSL rollout hasn't gone
particularly fast in St. Louis, while cable is in all neighborhoods," Seidel said.
"If they'd let us, high-speed Internet access would be in all of those
neighborhoods."

Slay, who has announced plans to run for mayor, denied that
SW Bell was behind his bill, insisting that he was not even aware of the open-access issue
until AT&T brought it to his attention. Further research, he said, revealed that a
federal court in Oregon had upheld Portland and Multnomah counties' authority to
require open access.

"I've talked to AT&T about this a lot more
than I have anybody else," Slay said. "But because this doesn't fit with
their business plan, they're mounting an aggressive campaign to stop it. Well, they
can sue the city, and I expect they will. But the broadband market is exploding right now,
and it's important that we push the envelope in terms of what we can demand for our
citizens."

Cable did manage to win one forced-access battle last week
when the Miami-Dade County Commission voted 10-2 against an ordinance that would have
forced 12 franchised operators in the area to unbundle their high-speed networks.

In a prepared statement, AT&T vice president of law and
government affairs Ken McNeely said the commission acted to "encourage further
investment" by operators in the community, predicting that other "broadband
investment will follow."

Mario Goderich, director of the Miami-Dade County Consumer
Protection Division, said commissioners rejected the proposal "at this time"
because of concerns that operators would refuse to roll out cable-modem service if the
measure passed.

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