AT&T-St. Louis, MediaOne-Cambridge Added

AT&T Corp. will need a "small miracle" toprevent St. Louis from becoming the fifth local jurisdiction to adopt an open-accesspolicy, company officials conceded last week.

And MediaOne Group Inc., which is merging with AT&T,has to deal with the fact that Cambridge, Mass., may become the sixth community to take oncable over the access question.

In St. Louis, the Board of Aldermen will meet this Friday(Oct. 29) to consider enacting a rapidly moving ordinance requiring AT&T Broadband& Internet Services to allow unaffiliated Internet-service providers to piggyback onits local network.

"This is being pushed through very quickly,"AT&T spokeswoman Deb Seidel said. "We knew we were fighting an uphill battle, butit's a battle that has to be fought."

Cambridge city manager Robert W. Healy, who has soleauthority over local franchising, said last week that MediaOne must agree to unbundle RoadRunner service before the city will transfer its system to AT&T.

MediaOne operates a 21,000-subscriber system in Cambridge,not counting 5,000 Road Runner customers. Healy dispatched a letter to AT&T announcinghis intentions and giving the company until Wednesday (Oct. 27) to respond.

MediaOne officials said it was premature to comment untilthe city officially takes action. "But [Healy] has said that he's willing totalk, and that negotiations are possible, so the fat lady hasn't sung on this oneyet," spokesman Rick Jenkinson said.

However, Cambridge public-information officer Ini Tomeusaid, "Something will happen soon," since the city only has until Nov. 11 to acton MediaOne's transfer request.

Cambridge would be the second Massachusetts community tojump on the access bandwagon. Somerville, Mass., another Boston-area city, has asked theFederal Communications Commission to decide whether cities have the right to unbundlecable operators' networks.

In a prepared statement, The National Cable TelevisionAssociation said it was "disappointed" that Cambridge had not joined"hundreds" of local franchising authorities that have "voted in favor of acompetitive marketplace, not government regulation."

The St. Louis ordinance could make already trickyfranchise-renewal talks on the company's 55,000-subscriber system in metro St. Louiseven more complicated.

Once enacted, AT&T would have to unbundle its localnetwork if it decides to upgrade its system in order to offer high-speed Internet accessin St. Louis.

Another option would be suing the city, as it has with twoother communities with open-access requirements. Company executives declined to discussthe possibility last week.

The Board of Alderman was scheduled to meet last Friday(Oct. 22) for the so-called perfection process that puts a bill in its final form. Onceperfected, a bill cannot be amended, which would allow the 29-person board to hold a finalvote on the open-access ordinance as early as this week.

"I think there are 15 votes out there," boardpresident Francis Slay said, noting that 17 alderman are co-sponsoring his bill. "Weexpect to perfect it. We expect final passage."

Meanwhile, AT&T suffered another setback when St. LouisMayor Clarence Harmon dispatched a letter to a recent board meeting endorsing the Slayordinance. Harmon was traveling abroad last week and unavailable for comment.

"[Harmon] made his decision without any input fromus," Seidel said. "If he studied the issue, he didn't have any contact withus."

Seidel said revisions to the bill -- one removing a clauseallowing ISPs to sue AT&T if it does not comply with the ordinance, and another makingthe measure effective upon passage, rather than in the typical 90 days -- were not enoughto mollify AT&T.

Experts said pushing open access during the renewal processgives the city more leverage. Theoretically, it could threaten to invoke a provision inthe amended 1934 Communications Act that allows a community to deny a renewal if theoperator's proposal fails to meet the community's presumed telecommunicationsneeds.

"This will be challenged," Paul Kagan AssociatesInc. regulatory analyst John Mansell said. "The question is going to be: Can yousubject a cable operator to more onerous obligations than even the incumbentlocal-exchange carrier?"

Others, though, said St. Louis was approaching the issuefrom the most logical angle.

The four communities with existing open-access requirements-- Oregon's Portland and Multnomah counties, as well as Broward County, Fla., andFairfax, Va. -- have all acted during the transfer process, when cities are limited inwhat they can demand.

"But it's more appropriate to [pursue openaccess] during the renewal process. As a Title VI service, Internet access falls withinthe city's right to establish what the community's telecommunications needsare," said an industry observer, who asked for anonymity.

AT&T believes the Slay proposal was written by SBCCommunications Inc.'s Southwestern Bell unit as a reaction to an FCC order thatrelieves regional Bell operating companies from having to unbundle digital-subscriber-lineservice.

"If you look, the DSL rollout hasn't goneparticularly fast in St. Louis, while cable is in all neighborhoods," Seidel said."If they'd let us, high-speed Internet access would be in all of thoseneighborhoods."

Slay, who has announced plans to run for mayor, denied thatSW Bell was behind his bill, insisting that he was not even aware of the open-access issueuntil AT&T brought it to his attention. Further research, he said, revealed that afederal court in Oregon had upheld Portland and Multnomah counties' authority torequire open access.

"I've talked to AT&T about this a lot morethan I have anybody else," Slay said. "But because this doesn't fit withtheir business plan, they're mounting an aggressive campaign to stop it. Well, theycan sue the city, and I expect they will. But the broadband market is exploding right now,and it's important that we push the envelope in terms of what we can demand for ourcitizens."

Cable did manage to win one forced-access battle last weekwhen the Miami-Dade County Commission voted 10-2 against an ordinance that would haveforced 12 franchised operators in the area to unbundle their high-speed networks.

In a prepared statement, AT&T vice president of law andgovernment affairs Ken McNeely said the commission acted to "encourage furtherinvestment" by operators in the community, predicting that other "broadbandinvestment will follow."

Mario Goderich, director of the Miami-Dade County ConsumerProtection Division, said commissioners rejected the proposal "at this time"because of concerns that operators would refuse to roll out cable-modem service if themeasure passed.