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from: Broadcasting and Cable

AT&T Is Cable Operator, Says Connecticut Court
By John Eggerton -- Broadcasting & Cable, 7/26/2007 3:33:00 PM

A Connecticut U.S. District Court has ruled that AT&T's Lightspeed IPTV video service is a cable service subject to local franchising laws.

The summary judgment was a victory for the New England Cable & Telecommunications Association, and the cable industry at large.

It was a defeat for the Connecticut Department of Public Utility Control (DPUC), which had ruled that AT&T's service was an information service, like other data services.

Central to the DPUC's conclusion was the way AT&T delivers its service, which is not to deliver a channel until the subscriber's set-top box requests it, rather than constantly delivering all the channels. That, said DPUC, was a level of interaction that made the service a two-way data exchange, or as DPUC put it "“[AT&T’s] network is unique in comparison to cable operators such as it entails a switched, two-way client server IP-based architecture designed to send each subscriber only the programming the subscriber chooses to view and entails a high level of subscriber interaction

The FCC defines cable service as one-way, though it includes VOD in that definition, so the DPUC concluded AT&T's service did not meet that definition.

The court saw it differently. Although factual findings by expert goverment agencies are due judicial deference under the Chevron doctrine, the court concluded that DPUC's determination that AT&T's was a two-way system was a legal conclusion-on the appropriate definition of "cable service"--rather than a factual finding, and a wrong legal conclusion at that.

AT&T is a cable operator, its service is a cable service, and its network is a cable network, said the court.

The cable industry has argued that AT&T's service should be subject to the same franchise restrictions as their members, but the DPUC had ruled differently.