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Spokane Spares AT&T the Ax in Spat

Internet Ventures Inc. lost the first round in its bid to
force its way onto the AT&T Broadband & Internet Services cable system in Spokane,
Wash.Spokane city manager William Pupo rejected IVI's request that AT&T Broadband's
cable franchise, which was formerly held by Tele-Communications Inc., be lifted for
refusing to provide channel space to Internet On-Ramp (IOR), an IVI affiliate.

In a written response, Pupo said, "Supporting the
economic interests of the ISP [Internet-service provider] industry or the cable
industry" was "not an appropriate function for my office."

"Both the Internet and the cable industries already
have ample resources to hash out the problem, which is currently under litigation in
Oregon, and which is something the [Federal Communications Commission] will eventually be
forced to address," Pupo wrote.

IVI president Don Janke has said that he intends to ask the
FCC to declare that high-speed-data services that can transmit compressed video signals in
a "streamed" format are providing video programming in a legal sense.

This could make it possible for IVI and other data
providers to lease channels from cable operators in order to provide data service --
possibly in competition with the operator's own Internet services.

IOR president Robert Bowman issued a statement accusing
Pupo of ignoring the wishes of the Spokane City Council, which transferred TCI's franchise
to AT&T Broadband "with the condition that competition and consumer choice in
cable broadband Internet services be ensured."

"AT&T/TCI must love doing business in
Spokane," Bowman said. "Over a six-week span, they have raised cable rates here
by more than $3 million per year, and they have, in effect, been shown by the city manager
that he will not support a City Council resolution that specifically was inserted to
protect citizens from AT&T/TCI's monopoly powers."

Bowman said Pupo had confused leased access with the
open-access controversy that has seen ISPs call for the unbundling of cable's high-speed
broadband networks.

"I don't think [Pupo] took a good look at what FCC
rules say about leased access," he said. "We're not talking about open access:
We're talking about leased access."

Bowman said IOR would take its case to the Spokane Cable
Advisory Commission next month, which he expects "will take it more seriously than
Mr. Pupo."

In a complaint filed with Pupo, IVI had alleged that the
franchise AT&T Broadband inherited from TCI required channel space to be made
available to unaffiliated programmers under federal leased-access rules.

It said the MSO refused to provide IOR with a single
6-megahertz channel to use to offer Internet access, and it should therefore have its
franchise "terminated."

However, Pupo indicated that AT&T Broadband had not
"categorically" denied the request, but rather, it was questioning whether
federal leased-access rules applied to ISPs.