S.F. PPV Offer Turns Heads

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Bills to AT&T Broadband & Internet Services
customers in San Francisco this month arrived with an offer of $16 in free movies, and
some local politicians are peeved about it.

It's not that the contenders for the mayor's office think
customers shouldn't be rewarded for their patience for a long-delayed system upgrade. It's
just that the bounty has been announced on letterhead from the office of the incumbent,
Willie Brown, and the bills are arriving in the days immediately prior to a heated mayoral
primary.

The other candidates - including supervisor Tom Ammiano and
former Mayor Frank Jordan - said the mailing smacks of cronyism and is lacking in ethics.
The announcement is tantamount to a free election mailer for the incumbent, they charged.

But AT&T Broadband said the timing of the billstuffer
was not influenced by the election, nor by any thought of currying favor from Brown.

In fact, the cable company would rather not send the
stuffer at all, as it represents a $2.8 million concession the operator had to make to
complete the transfer of the Tele-Communications Inc. cable properties to AT&T Corp.

The operator had committed to upgrade the system, which
serves 177,000 customers throughout the city. However, it may take up to four more years
before the system can be made state-of-the-art.

To compensate the consumers for the wait, the city demanded
during franchise negotiations that AT&T Broadband provide consumers with four free
pay-per-view movies and stipulated that the offer be made before the end of the calendar
year.

Andrew Johnson, spokesman for AT&T Broadband's West
Coast operations, said November and December bills are reserved for annual mailings
mandated by the Federal Communications Commission.

The new franchise wasn't concluded until August because
Internet competitors tried to convince legislators to force open the operator's
cable-modem platform as a condition of the franchise transfer, and those hearings delayed
an agreement. So logistically, October was the only month for the communiqué.

As for Brown's participation, Johnson noted that it has
been traditional in San Francisco for communications about rebates, refunds or
public-affairs programs distributed in cable bills to be issued under the mayoral
letterhead.

This practice goes back to the days of Viacom Cable, which
annually included an HIV-services directory in bills with the mayor's signature. Indeed,
Jordan, one of Brown's critics, signed some of the previous mailers.

"It's election season. This is an attempt to take pure
happenstance and turn it into something else," Johnson said.

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