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from: New Haven Register

AT&T won’t halt TV services
Gregory B. Hladky, Capitol Bureau Chief
10/04/2007

-HARTFORD — AT&T executives insisted Wednesday that an adverse federal court ruling won’t curtail operation of their new television service, saying they will continue to offer alternative TV to more than 100,000 consumers.

The federal decision issued this week would require AT&T to obtain a state cable TV franchise for its service. But top company officials say the impact of that ruling has been negated by a state law that took effect Monday.

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State Attorney General Richard Blumenthal, however, insisted AT&T’s application for a separate license under the new law is "fatally flawed" and the federal ruling takes precedence over state law.

Blumenthal demanded AT&T immediately halt signing up new customers and he called on the state Department of Public Utility Control to act in the case.

AT&T has denied its TV service is the equivalent of cable TV and argues it shouldn’t be held to the same franchise standards. Critics like Blumenthal claim the company should be required to provide service throughout Connecticut, rather than only affluent areas.

DPUC spokeswoman Beryl M. Lyons said the agency is still studying the federal ruling. Lyons said if the judge has overturned a previous DPUC ruling, then AT&T’s service would be considered a cable rather than Internet service and the company would be required to obtain a cable franchise license.

But Lyons said the state law that took effect this week may allow AT&T to offer "video service" without seeking a cable franchise license. Lyons said that law doesn’t require video service be offered statewide. Lyons said DPUC has about 45 days to decide on AT&T’s application for a video service license.

Chad Townes, AT&T’s Connecticut vice president and general manager, accused Blumenthal of "attempting to turn back the hands of time" and seeking to prevent pro-consumer competition. Townes said U.S. District Judge Janet Bond Arterton "refused to grant a request that (AT&T) halt the sale of television services."

AT&T began offering its telephone-line TV service in Connecticut last December and now says it provides service in 40 communities, including New Haven, Bridgeport, Hartford and their suburbs.

AT&T spokesman Seth Bloom said the company’s TV service has been "a huge success" and the customer base "tripled in the last three months." Bloom said the new state law on "video services" includes virtually all protections Blumenthal demanded, including provisions to prohibit choosing of communities "based on income."

Connecticut cable TV companies are licensed as franchises; each has its own geographical service area, with no head-to-head competition between them.

The AT&T television service uses its telephone line system, allowing it to compete directly with local cable TV operations. The federal ruling stemmed from a legal challenge Blumenthal’s office and the state Office of Consumer Counsel filed. Those agencies sought to overturn an earlier DPUC decision not to require AT&T to obtain a state cable franchise license.

Townes argued Wednesday that Blumenthal’s opposition to their service would limit competition and "embrace a cable monopoly."

But Blumenthal said forcing AT&T to obtain a cable franchise license would "level the playing field with AT&T’s competitors."

Blumenthal said his office is considering action it might take to force DPUC and AT&T to "follow the law in the face of a clear-cut court ruling."