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AT&T fights US open cable tide

But is it winning? Despite appearances, we think not...

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AT&T's terrifying PR apparatus battled tirelessly in the San Francisco Bay area this month, and finally won what many believed was a startling reversal of a local decision to force it to open its network to rival companies. The San Francisco Board of Supervisors appeared to reject its own earlier resolution supporting mandated open cable access by a nine/two vote. "I'd stress that [the opposition] have had extremely limited success at the local level, and they've had no success at the national level" AT&T General Counsel Jim Ciccone gloated during a press conference yesterday. But The Register sees it differently. After voting unanimously to affirm its commitment to open access as general policy, the board set to bamboozling mighty Ma Cable. The core issue involved a barely-veiled threat by AT&T to delay or even scupper an essential upgrade to its Bay-area cable lines if forced to carry competitors on it. The city, obviously, needed a signed agreement that the lines would be improved, as they are not yet fully bi-directional. Thus did San Francisco wisely reject a motion to require open access immediately, by a vote of eight/three. So far so good. The board then voted on softer language, essentially postponing a final decision on mandated access and interlarding it with numerous conditions, which it passed seven/four. It then did the business it had convened to do, and voted to include the watery language in its ratification of the AT&T/TCI franchise agreement by the now-famous nine/two concoction. And this is where things get interesting. AT&T promptly signed an agreement with San Francisco to upgrade the cable network it inherited through its purchase of TCI on the strength of that vote. Ah, but the board's resolution is chock full of realpolitik wiggle room. It enables the city to mandate open access if the Portland decision on the same subject should be upheld on appeal. More importantly, according to terms long understood, the franchise agreement with AT&T/TCI empowers the city to mandate open access unilaterally on 1 December if it so chooses. Indeed, AT&T has been in violation of the agreement since boldly closing its deal with TCI ahead of the board's ratification. AT&T needed a hasty resolution, any resolution, and even a crummy one would do. Mighty Ma Cable was playing an uncharacteristically weak hand with which it managed to bluff only two of eleven members -- one of whom, we note with some ironic pleasure, was Tom Ammiano, the board president. Ammiano characterised the final resolution as a lot of "hocus-pocus and hooey". Perhaps the Ninjas got to him. In a complimentary surprise, the Bay Area Open Access Coalition, a "grassroots" front group backed by Pacific Bell, GTE and similar little Mom and Pop outfits, abandoned their Birkenstock-and-granola populist rhetoric in light of the Board's decision. The focus has now shifted to the finer distinctions between "open" and "free" access, as Director Katie Roper emphasised that the Coalition's member companies have always intended to compensate AT&T for access to its cable lines. "We're not asking for free access," she said modestly. A far cry from the Great Proletarian Cultural Revolution she'd been calling for a week ago. Perhaps she's finally catching on to the real tactics at play here. The question now becomes why the Coalition demanded open access in such laughably hyperbolic language when all they ever wanted was to buy it. AT&T is hardly averse to making a profitable sale, after all. Or is it? GTE Associate Counsel John Raposa confided to The Register that he doubts AT&T intends to accept piggyback partners on "any reasonable terms." His scenario foresees AT&T shuttling ISPs to their portal, Excite@Home, and exacting such exorbitant fees that consumers will be charged double, once for basic service, and again for access to AT&T cable. Any ISP works the market, cutting various deals for various levels of service from backbone providers, Raposa points out. If Ma Cable spreads her tentacles adequately, and God knows she has the resources to do so, the "terms" will be hers to declare. To be fair, The Register tried with little success to get a statement from AT&T affirming its desire to sell cable access to its competitors. The best we could get, after numerous clarifications, was an assurance that the company welcomes "negotiation on any reasonable business basis." Not quite the same as saying that they would welcome the agreements themselves, we observe. But Raposa remains optimistic in view of the SanFran resolution. "There is no doubt in my mind that San Francisco will [ultimately] require open access," he chuckles. And if he's on track, Portland be damned; the city has reserved the right to smack Ma Cable around at will. Others may well follow. The urge, after all, is virtually irresistible. ®

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