Ops Drop Ballot Initiative in St. Louis

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St. Louis cable operators have withdrawn their petition for
a November ballot initiative to challenge the city's open-access policy.

Executives for Charter Communications Inc. and AT&T
Broadband & Internet Services said they see a better outcome from negotiations with
the city's Board of Aldermen on the issue than from waiting for an election eight
months from now.

The aldermen passed a resolution last year to require the
operators to open their high-speed-data platforms to competitors on financial terms
comparable to those they offer to their own affiliates. AT&T Broadband serves the
city, but it has a letter of intent to swap the system with locally headquartered Charter.
Charter currently serves St. Louis County.

The operators helped to form Citizens for Lower Phone Bills
and launched a petition drive to force a November vote on the policy. But recent positive
indicators from the aldermen -- especially Francis Slay, the author of the open-access
measure -- caused the operators to back away from the referendum.

Several factors may have come into play to shift the stance
of the combatants. St. Louis' cable infrastructure is in need of upgrade. City
fathers may be able to use the threat of retaining the open-access policy to compel
Charter, the ultimate operator, into greater system improvements.

"Open access will be part of the discussions. The city
is committed to consumer choice, but we are also committed to an upgrade.
Everything's on the table," Slay said. "This [agreement to negotiate]
should not be looked at as a retreat. We have a lot more leverage now -- a hammer."

But that hammer could disappear if the U.S. District Court
of Appeals for the Ninth Circuit, delivers a decision favoring the cable industry in the
case pitting the city of Portland, Ore., against AT&T Corp.

Slay said he believes the operators dropped the referendum
because "AT&T and Charter recognized that they wouldn't win anyway."

An AT&T spokesman said the election was seen as an
impediment to successful renewal negotiations.

"In recent weeks, AT&T has been encouraged by
indications that the city of St. Louis is prepared to undertake meaningful steps to renew
the local cable franchise," AT&T Broadband regional director of franchising Paul
Berra said in a prepared statement.

The city may finally look at the issue from a regional
perspective, added Celeste Vossmeyer, vice president of government relations for Charter.
Charter's county systems have been substantially upgraded, and the operator plans
parity in its future urban upgrade.

Vossmeyer met with Slay recently, she said, and the contact
left her "very optimistic that we can negotiate a modification of the ordinance and a
transfer at the same time."

While the rhetoric cools in Missouri, it's about to
heat up in the state of Colorado. Rep. Ron May (R-Colorado Springs) confirmed that he
intends to introduce a bill this week requiring open access in cable systems with 2,500 or
more subscribers.

"I'm not sure I can get the bill through, but I
want press coverage on this issue," he said frankly.

To bolster his argument for open access, May read an e-mail
he received. The writer described herself as a retired AT&T executive and @Home
subscriber. The e-mail server fails three to five times a week, she wrote, and complaints
to the company elicit the plea, "We're expanding fast. It will get better."

Further, the help desk doesn't take responsibility for
problems, instead assuming that the problems were caused by home-computer equipment.

"People shouldn't have to take AOL [America
Online Inc.] as a backup" because of Excite@Home Corp.'s problems, May said.

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