SBC Sues Calif. City Over Access

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AT&T Inc.’s SBC California unit wants a state court to legally affirm what the telephone company has been saying all along: that its video service does not meet the legal definition of a cable service.

Pacific Bell Telephone Co., which does business in the state as SBC California, filed a federal lawsuit in U.S. District Court for the Northern District of California, in San Francisco, without fanfare on Nov. 17. It claims the Bay Area community of Walnut Creek violated federal and state laws when it refused the telephone company a permit to “encroach” upon municipally controlled rights of way.

The city maintains SBC’s work is preparing the plant to provide video service — and therefore SBC needs a cable franchise.

SBC California — which is being renamed AT&T on Jan. 1 — has consistently maintained its video product will be a two-way switched network to transmit voice, data and video on an on-call or session-based format that is controlled by the user. A cable service, under federal law, uses one-way transmission, telco executives argued.

But city regulators across the country have a different take on the service, focusing on the content rather than the technology of the pipeline. Some argue that if SBC delivers the same content as the local cable operator, then it is providing a cable service.

Officials in Walnut Creek said SBC doesn’t want a level playing field when it becomes the third landline provider in the market. Comcast Corp. and Wave Broadband are franchised cable operators in the town.

Paul Valle-Riestra, senior assistant city attorney for Walnut Creek, said on Dec. 9 that the city had not been served with the month-old lawsuit papers.

That might be because SBC and the city were still negotiating a settlement and planned to meet last week, he said.

The dispute began last June. SBC’s complaint notes that the telephone company needs to remove old technology used to extend phone service in the days of all-copper plant. With the addition of fiber, though, that hardware now degrades service.

SBC maintains its state telephone franchise empowers it to use the rights of way, but applied for a permit last June to close a Walnut Creek bikeway temporarily “out of an abundance of caution.”

The city agreed to grant the permit, but only with a condition stating SBC would not deliver video until it got a cable franchise. That condition is “improper, unlawful and unenforceable,” says the suit filed in U.S. District Court for the Northern District of California.

SBC argues city authority over rights of way is limited to reasonable time, place and manner restrictions on construction. Even if the court finds SBC’s product is a cable service, the suit argues that its state franchise is sufficient regulation.

The telco wants the court to declare SBC can work on its plant and to order Walnut Creek to set aside franchising conditions. The court should also declare that city franchising of two-way, Internet protocol -based services is contrary to state and federal laws, the suit said.

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