Oregon Authorities OK AT&T Transfer

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Oregon franchising authorities have transferred another
150,000 cable subscribers to AT&T Broadband & Internet Services, despite their
ongoing legal dispute.

Portland and Multnomah counties agreed to transfer
franchises held by Paragon Cable to AT&T Broadband, pending the outcome of a lawsuit
filed by the MSO over an attempt by the two jurisdictions to unbundle its @Home Network
cable-modem platform.

Local officials, however, said the transfers include
provisions -- temporarily held in abeyance -- that make access to @Home mandatory if the
court rules in favor of the franchising authorities.

"We did it this way so that we wouldn't end up in
court again," said Marshall Runkel, aide to Portland City Councilman Erik Sten.
"If we could make a reasonable accommodation, then there is no legal reason for the
city not to approve the transfer."

AT&T Broadband sued Portland and Multnomah counties in
an Oregon District Court in January, after regulators tried to make open access for
unaffiliated Internet-service providers a condition for transferring 31,000
Tele-Communications Inc. subscribers.

A decision is expected shortly.

Under the latest transfer arrangements, AT&T Broadband
receives some 150,000 subscribers served by Paragon east of the Willamette River, making
it the lone cable provider in the county.

AT&T Broadband acquired the systems under a swap worked
out between TCI and Time Warner Cable, Paragon's parent, last year.

The transfers require AT&T Broadband to meet all
obligations contained in Paragon's franchises, including performance guarantees;
maintaining local management and offices; cable and Internet hookups for area schools and
libraries; and one regional channel lineup.

But despite the compromise, Runkel indicated that the two
sides remain at odds.

So far, AT&T Broadband has refused to begin rolling out
@Home in the area, despite suggestions that the service could be introduced pending the
outcome of the lawsuit, he said.

"We've had word from the highest levels of
AT&T refusing to do that," he added.

The result has been complaints from consumers who are
interested in purchasing the Internet service.

"We feel like they're holding residents of
Portland and Multnomah counties hostage," Runkel said. "It's going to be
real interesting to see what happens once this decision comes down."

AT&T Broadband spokesman Kevin Mulligan said the
company had begun introducing @Home in suburban Portland areas, but it felt that it should
not offer the service inside Portland and Multnomah counties while the litigation was
pending.

Moreover, he claimed, Portland director of franchising
David Olson supported that position.

"But the moment the lawsuit is resolved, we're
going to roll it out in the first hour," Mulligan added.

Olson, however, denied that he backed AT&T's
decision to withhold @Home locally, insisting, "We've made every reasonable
attempt to get them to introduce the service."

"We don't think people should be deprived of the
service," Olson said. "But I think they're concerned about the litigation.
They feel that they're safer not rolling it out than rolling it out and being subject
to open access if they don't prevail in the lawsuit."

Meanwhile, city governments are also awaiting the
conclusion of a months-long study on high-speed-data-platform regulation undertaken by the
city of Los Angeles.

Discussion of that report has now been delayed until the
June 17 meeting of the city's Board of Information Technology Commissioners.

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