AT&T appeals Portland cable ruling

By David Rohde
Network World Fusion, 06/17/99

AT&T Wednesday filed what it called an expedited appeal of a recent federal court ruling that threatens to upset its entire broadband cable access strategy.

The company asked the U.S. Court of Appeals in San Francisco to move quickly to decide whether a district court in Portland, Ore., was right to order AT&T to open its cable lines to all ISPs. AT&T lawyers asked for a special fast-track procedure that would lead to court arguments by September and a decision shortly thereafter.

The court's decision stunned AT&T. Consequently, AT&T has demanded that no government authority force it to make its cable lines available to competitors. The court ruling also contradicts a decision by the Federal Communications Commission not to put any such conditions on AT&T's recent acquisition of the former No. 1 cable TV company, Tele-Communications, Inc. (TCI).

AT&T obtained the Portland cable lines in the TCI takeover, and the carrier is now proposing to merge with another large cable provider, MediaOne group.

In a press briefing, AT&T officials said an appeal courts rejection of the Portland decision would force AT&T to delay rolling out high-speed @Home cable-modem service in Portland, now scheduled for the third quarter.

The company claimed it is technically unable to "unbundle" the cable network to let competing ISPs offer service over the AT&T local facilities. GTE and America Online earlier this week demonstrated just such an unbundling system for policymakers in Washington. Incumbent local telephone companies also must unbundle their networks for resale to competitors - including AT&T's own local division for business customers.

On its own, the Portland district court ruling does not quash AT&T's national strategy of competing with local telephone companies for telephony and Internet access down to the residential level. That's because district court rulings do not apply outside their regions. However, AT&T general counsel Jim Cicconi said GTE and AOL are now shopping so-called "Portland clauses" to other municipalities around the country, leading to a possible snowball effect.

Cicconi accused AOL of seeking open access because it has sold off network infrastructure to others such as MCI WorldCom and has not replaced it. "They're seeking government intervention to gain the use of networks that they didn't want to invest in themselves," he said.

Cicconi also repeated earlier statements by AT&T Chairman C. Michael Armstrong that AT&T may eventually invite competing ISPs in on its own but doesn't want to be government mandated to do so. "We've indicated all along that our door is open for any [ISP] that wants to have that discussion," Cicconi said.

In the court fight, AT&T appears to have the support of FCC Chairman William Kennard, who has all but staked the future of local residential competition on Armstrong's strategy. "There are 30,000 local [cable] franchising authorities in the United States," Kennard said in a speech Tuesday before a cable convention. "If each and every one of them decided on their own technical standards for two-way communications on the cable infrastructure, there would be chaos."

But Kennard warned his support for AT&T's strategy may wane if AT&T does not fulfill what Kennard says is a promise to bring high-speed Internet access to poor and rural areas.

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