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AT&T faces trench warfare over US open cable plans

City by city, its broadband network could be pried open for rival ISPs

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American telecoms Titan AT&T may soon find itself in a tedious, and costly, campaign of legal trench warfare, defending its right to snub opportunistic hangers on to its newly-acquired cable networks. The nightmare scenario follows a recent US federal court decision in Portland, Oregon effectively forcing AT&T to make broadband cable available to narrow-band ISPs like America Online. Interestingly, Judge Owen Panner declined to rule on open access as a matter of policy, but simply affirmed Portland's authority to regulate cable companies operating within its jurisdiction. "The issue is whether the city and county have the power to require access to the cable modem platform as a condition of approving AT&T's takeover of the cable franchises. To resolve the legal issue, I don't need to consider whether the open access requirement is good policy," Panner wrote. Unless his decision is overturned on appeal, AT&T faces a long, slow slog through the trenches exhaustively defending its cable network from every covetous municipality in America. Even Ma Bell's awesome legal militia would be spent by such a colossal undertaking. Since the Portland decision, Broward County, Florida's board of commissioners approved mandated broadband access for their independent ISPs, as did the San Francisco board of supervisors. AT&T flacks dryly characterised the actions as "unacceptable," as if they had been created arbiters of government behaviour. It's getting ugly in a hurry. Logic gets tortured beyond all recognition here because AT&T's best chance to escape taking on every county and municipal board in America would be a preemptive Federal Communications Commission or Congressional regulation upholding its right to operate cable networks as privately-owned assets. The terror there of course is that the FCC or Congress might well judge them to be national assets now that Gargantua has set to gobbling them up. And Portland is only round one; regardless of how the appeal should go, AT&T is going to face the Feds in the near future because the nation has taken notice - of broadband's advantages, of the extraordinary consolidation going on among American information and technology-related empires, and of the growth that open access might inspire among small to medium info-tech firms. It was with that inevitable reckoning in mind that AT&T Chairman Michael Armstrong courted the Senate Judiciary Committee last week. In a spectacular show of old-fashioned Yankee hucksterism, the former IBM salesman-turned-chairman fairly instructed several of America's most experienced and gifted politicians in the art of delivering a spiel. He wanted the Committee to understand the value for money that his mega-corporation is already providing the American consumer. He had the charts and graphs; he had the spotlight: "We're offering, at lower price, higher feature, and more function, a phone for Mom; a phone for Dad; a phone for the kids; a phone for the fax; a phone for the computer, with distinctive rings -- at only five dollars a line," he intoned, exploiting the slick, hypnotic rhythms of a master carnival barker. "A hundred analogue channels is going to become a thousand digital interactive channels; and of course the Internet is going to explode, and a whole new array of technologies is going to come." It was a consummate performance; and if the Judiciary Committee - which boasts such grandmaster rhetoricians as Orrin Hatch, Patrick Leahy, Strom Thurmond and Robert Torricelli - was awed by Armstrong's theatrical virtuosity, it remained a bit jaundiced on his core message. Congress is concerned that consumers and small to medium Web-related companies may get burned when the Internet "explodes" with broadband: US giants AT&T, Time Warner and Microsoft are so snug in bed now that their unholy union might well reach critical mass. Certainly they are companies that know how to dominate a market; certainly the word "monopoly" has been heard on the lips of more than one impeccably sober and socially-responsible onlooker. Massachusetts Representative Edward Markey is among those most jaded. Markey, who was instrumental in developing both the 1992 Cable and 1996 Telecommunications acts -- and, as we might imagine, has a fair grasp of the matter in both realms -- will introduce a proposal in the House later this week equating cable data with telephone data. He sees no reason to discriminate between the two. Much to AT&T's chagrin, Markey has said publicly that it would be a "mistake" to maintain two networks: the phone, which is open, and cable, which is closed. Markey's Chief of Staff, David Moulton, advised The Register not to expect a dramatic turn in the immediate future, however. "The FCC are watching this," he said, "but right now their signals are mixed." Moulton thinks it unlikely that the FCC would act before the Portland case goes through all its appeals. Certainly Congress won't jump the gun either. AT&T will have to slug it out in the trenches with greedy, perhaps vindictive, municipal governments for a while yet. And regardless of what may happen there, the White House and Congress are patiently waiting their turns to weigh in. Ah, but so long as Armstrong's promotional recitals remain as inspired as last week's, the show will be spectacular. ®

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