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The battle between Portland, Oregon and communications behemoth AT&T has been shifted to federal turf, as the Ninth Circuit Court of Appeals ruled on Friday that local jurisdictions do not have authority to force cable companies to share telecommunication lines with local ISPs.

The appeal follows a Portland City Council decision to make the transfer to AT&T of a local cable franchise conditional on AT&T opening its broadband Net connections. Last June, a federal judge in Portland upheld the Council's decision, despite AT&T's strenuous claims that such regulatory authority belongs to the Federal Communications Commission (FCC).

The appellate court ruled that cable Internet access is properly classified as a telecommunications service, and not as a franchise as in the case of cable television.

"Applying the carefully tailored scheme of cable television regulation to cable broadband Internet access would lead to absurd results, inconsistent with the statutory structure," the court said.

By classifying broadband Internet access as a telecommunications service, the court has effectively left it for the FCC to regulate, or not regulate, as it sees fit. This gives AT&T real pleasure, as it has maintained all along that such should be the case.

This hardly means that the company and its heavyweight peers will be immune from having to accept piggyback local ISPs. It simply means that local jurisdictions won't be the ones to decide. The decision may only be postponing the inevitable: the FCC might well be willing to mandate just this sort of regulation at the federal level.

Of course, the appellate court's decision is hardly binding on the FCC, and the Commission has every right to disagree that broadband is a telecomms service subject to its authority. This, of course, is what AT&T is hoping.

Whether it wins or loses in the long run, the clear advantage here for AT&T is no longer needing to fight each jurisdiction individually, an exercise which could be exhausting even for a colossus such as Ma Cable. The company can now consolidate and focus its resources on lobbying Capitol Hill, for which it is already magnificently equipped, and seek to influence election hopefuls in need of cash with its 'market solutions for every human ill' rhetoric.

At a time like this, with national elections looming in less than six months, such arguments can be wickedly persuasive, we've noticed. ®

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