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Boston, AT&T Clash Over Deregulation

Washington— AT&T Corp. is resisting Boston's efforts to overturn a Federal Communications Commission order that completely deregulated AT&T's cable rates in the city.

Although it was widely reported last week that Boston had appealed the FCC's July ruling, it was not widely reported that the city had asked the FCC to stay its decision and reimpose rate regulation while the appeal was pending before the agency's five members.

On Monday, AT&T filed a response to the stay, urging the FCC to find that Boston met none of the four legal criteria that would merit nullifying the effect of the deregulation order.

"[Boston] fails to even address how grant of its stay request will be in the public interest. For this reason alone, the [FCC] should find that [Boston] has not met its [legal] burden," AT&T said in a 15-page reply.

In deregulating AT&T in Boston, the FCC's Cable Services Bureau blocked the city from regulating basic programming and equipment rates. The expanded-basic tier was already deemed deregulated on March 31, 1999 under the Telecommunications Act of 1996.

Boston is opposing the FCC's deregulation order on the basis that AT&T's chief wireline competitor — RCN Corp. — is not providing service on a broad enough basis to keep a lip on AT&T rates. RCN has approximately 12,000 subscribers, while AT&T has about 150,000 in Boston, according to the city's cable office.

But AT&T told the FCC that the agency correctly held that federal law and FCC rules do not require a finding of wall-to-wall competition in a franchise area before incumbent cable operators are legally entitled to deregulation on the basic tier.