Openness Is No Guarantee Access Wont Be an Issue

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Despite a vow by AT&T Broadband & Internet Services
that it will open its high-speed-data platform within three years, municipalities are not
dropping the open-access debate. In fact, two more cities adopted the condition last week
as they approved the transfer of MediaOne Group Inc. properties to AT&T Corp.

Culver City, Calif. -- home of Sony Pictures -- and Henrico
County, Va., became the 10th and 11th local franchising authorities
to mandate forced access. Culver City unanimously approved the conditional transfer of its
franchise Dec. 13.

Ironically, MediaOne may be the victim of its success in
that market. That MSO's Los Angeles cluster has used the media-savvy community as the test
bed and launch market for its data products. As a result, consumers there are more aware
of the desirability of cable modems.

"Culver City is an incredible place. There are a
number of digital firms and e-businesses here, and they have come because of the
broadband, because of MediaOne and their plant," said Randi Joseph, public
information officer for the city. But the dense use of that plant has made it part of the
public domain, she added.

Given the speed of technological change, AT&T's promise
to open the platform "could be a moot point by then," Joseph added. "This
is not an attempt to regulate the Internet, but to regulate our franchise," she said
of the access vote.

MediaOne argued that forced access unjustly enriches
competitors that did not undertake the same kind of investment as the cable company. But
in the end, the City Council gave more weight to Internet users who complained about
paying twice to access the content providers of their choice.

Henrico County became the 11th jurisdiction to
require open access when county officials voted 3-2 to send their MediaOne franchise to
AT&T, but only if it unbundles its network no later than Dec. 31, 2000.

The county is the second Virginia venue to require access,
joining the city of Fairfax, which is demanding that Cox Communications Inc. open the
local network it acquired from Media General Inc.

MediaOne general manager Ken Dye said, "We are very
disappointed in the Henrico County Board's decision, but more so for Henrico residents.
MediaOne and AT&T wanted to bring consumers high-speed Internet access and advanced
digital video. County officials may have put those plans in jeopardy."

Cable officials noted that the county acted despite a
"strong" recommendation from a telecommunications-advisory group that argued
against requiring outside access.

"The AT&T-MediaOne merger would have offered
consumers new choices, new services and lower prices for local telephone service and
high-speed Internet access. This restriction on our merger will surely delay competition
in the marketplace and the benefits that Henrico County consumers deserve," said
Wilman McCarey, vice president for AT&T in Virginia.

Council chair Pat S. O'Bannon said the committee supported
open access, but it worried about slowing AT&T Broadband's deployment, its thinly
veiled legal threats and the availability of equipment. Its suggestion was to approve the
transfer, but with a clause allowing the county to revisit the issue later, O'Bannon
added.

"It appears that AT&T does not plan to have open
access until 2002," O'Bannon said. "The questions we had to answer were: Are
they doing this because it's technically unfeasible? Is it contractual because of their
deal with Excite@Home [Corp.]? Or are they simply attempting to delay? We felt like if
everybody is waiting to see what somebody else gets, maybe we should just go ahead and
ask."

Meanwhile, four Massachusetts communities continued to defy
AT&T's bid to acquire their MediaOne cable licenses.

Cambridge, North Andover, Quincy and Somerville last week
asked the state Department of Telecommunications and Energy's Cable Television Division to
hold hearings on whether they can require open access.

Citing the access issue, Somerville and Cambridge have
rejected AT&T's transfer request, while Quincy and North Andover have conditioned
their acceptance on area Internet-service providers being allowed on their local networks.

MediaOne, which is asking the DTE to overturn the decision
by the four communities, had no immediate reaction to the filing.

Access supporters, however, insisted that there's no reason
for the DTE to rush the transfer process.

"Since there is no reason why the DTE has to act so
quickly to approve the transfers, it will now have the chance to decide what it is more
important: creating good public policy or rubber-stamping the business plans of the cable
monopolies," said Greg Simon, co-director of OpenNet Coalition, a Washington,
D.C.-based group of ISPs pushing open access.

A DTE spokeswoman said whether the agency agrees to hold
hearings on the access question will be at the discretion of director Alicia Matthews.
That makes the situation problematic for the cities, since the agency has already decreed
that open access is not relevant to transferring MediaOne's licenses in the state -- a
position recently upheld by a special magistrate.

In their filing, the four communities alleged that AT&T
and MediaOne mislead the DTE and local governments during regional hearings by insisting
that open access was not financially and technically feasible, and that it would slow
product innovation.

That, according to the filing, is "directly
contrary" to AT&T's recently unveiled plan for allowing ISPs onto its network,
which essentially concedes that open access is possible.

On the legal front, Comcast Corp. filed its answer last
week in a lawsuit filed by GTE Corp. alleging that the operating policies of cable-modem
marketers violate federal antitrust law.

The brief, filed in U.S. District Court for the western
district of Pennsylvania, asserted that GTE is using the courts to "reduce and damage
competition."

"Telephone companies have had
[digital-subscriber-line] technology for nearly a decade, but they sat on it. They only
began to aggressively roll it out -- and dramatically lowered their asking price -- after
cable brought competition to the Internet-services market," Comcast Online senior
vice president David Juliano said in a prepared statement on GTE's suit.

Further south, Comcast and Advanced Cable Communications
have been dismissed as plaintiffs in a lawsuit challenging the open-access mandate
approved by Broward County, Fla. The two operators have no standing because they have not
deployed modems, according to the court.

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