Voters OK AT&Ts Denver Franchise

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Denver -- Voters here approved a new 10-year franchise for
AT&T Broadband & Internet Services last week, paving the way for a $200 million
upgrade of the MSO's local system.

Moreover, the margin of 64 percent to 36 percent ended any
hopes a local coalition of Internet-service providers had of convincing voters to amend
the deal to include an open-access provision.

Surprisingly, the overwhelming support for AT&T
Broadband -- a big local employer after buying the former cable operations of Englewood,
Colo.-based Tele-Communications Inc. and dealing to buy Englewood-based MediaOne Group
Inc. -- ran well ahead of what recent polls had suggested.

"Which was strange, because our internal polls showed
that each day, we were widening our lead," AT&T Broadband spokesman Matt Fleury
said.

Part of the runaway victory was tied to the $1.5 million
AT&T spent on local television and newspaper ads to sell the new franchise to area
residents.

But even with the vote seemingly in hand, some 120 AT&T
Broadband employees spent Election Day on local street corners, waving placards and
directing voters to the polls.

"And wouldn't you know it turned out to be the
coldest morning of the year?" Fleury said. "But from the beginning, we
approached this campaign with a healthy regard for not taking anything for granted."

Fleury added that an upgrade of the company's
1,400-mile cable network should be under way by year's end.

Under the terms of its new franchise, the MSO has until
2004 to complete the project. But Denver officials have agreed to tack another five years
onto the agreement if AT&T Broadband can complete the rebuild one year ahead of
schedule.

AT&T Broadband's chances of winning the election
were given a boost recently when U S West, Colorado's largest local-exchange carrier,
withdrew its support for the ISP coalition that was seeking to scuttle the franchise.

The group was asking area voters to veto the franchise
unless it was altered to include a provision forcing AT&T Broadband to allow
competitors to piggyback on its planned high-speed network.

"We thought it was significant that a large percentage
of people voted against the franchise," said Mark Stutz, spokesman for RMI.NET, a
Denver-based ISP that continued to speak out against the deal after U S West withdrew its
financial backing. "We think it indicates that there is still a lot of concern out
there about how much competition and choice there is going to be in the market."

Meanwhile, AT&T Broadband last week began marketing
telephone-over-cable service to several-hundred paying customers as part of its telephony
trial in the nearby suburb of Aurora, Colo.

The company has similar trials under way in Fremont and
Pleasanton, Calif.; Chicago; Seattle; Dallas, Pittsburgh; and Salt Lake City.

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