Will Oregon-Cable Deal Unravel?

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The two sides in the dispute over whether Oregon
Internet-service providers will be allowed on the @Home Network were at it again last
week.

Just days after unveiling an agreement that would have
transferred two of Tele-Communications Inc.'s area cable franchises to AT&T
Corp., a squabble had broken out over language in the deal.

The Mount Hood Cable Regulatory Commission said AT&T
"walked away" from the arrangement because of wording that allowed area ISPs
onto the high-speed @Home platform under federal commercial leased-access rules.

"They apparently don't want any mention of
commercial leased-access," said a regulatory source familiar with the talks.
"That's a deal-breaker for us."

Meanwhile, AT&T officials "absolutely and
categorically" denied abandoning the agreement, which obligated the company to comply
with all federal, state and local laws governing Internet access.

Nevertheless, the MHCRC will meet today and could vote to
forward its original recommendation to Portland and Multnomah County. That plan urged the
two jurisdictions to reject the transfer of their TCI cable franchises unless AT&T
agreed to ISP access.

However, Rick Thayer, AT&T chief commercial counsel for
the Western region, said no provision guaranteeing ISP access appeared in the agreement
negotiated with "the city and county counsel." Moreover, Thayer said city
officials agreed with AT&T's position.

"The language embedded in the agreement does not
provide for the obligation you're talking about," Thayer said.

TCI officials also disputed any contention that the
agreement with the MHCRC assured local ISPs a spot on the @Home platform.

"We agreed to abide by all federal, state and local
laws governing Internet access, and that's all we agreed to," said Madie
Gustafson, TCI senior vice president for franchising. "And we agreed to abide by
federal leased-access rules, which we would have had to, anyway. We would never have
agreed to ISP access through commercial leased-access rules.

"Those are rules that are governed by federal law and
only apply to video. Why, then, would we agree to allow a city to dictate the unbundling
of our network?" Gustafson added.

She said that AT&T and TCI also assured the commission
that any new restrictions imposed on the companies by the two Oregon jurisdictions would
be "challenged."

Barring any last-minute developments, officials in Portland
and Multnomah County are expected to vote on the MHCRC's recommendation this
Thursday.

Industry sources contend that TCI and AT&T want the
Federal Communications Commission to have the final say in the ISP-access controversy
because they believe the agency will come down on their side. The companies have
consistently argued that access to their network should be the result of a business
negotiation rather than a government mandate.

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