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from: Stamford Advocate

AT&T's fiber-optic TV is tied up in knots
By Brian Lockhart
Staff Writer

August 12, 2007

For months, AT&T has been attempting to lure Cablevision and satellite customers in Norwalk, Stamford and 33 other municipalities to its new U-verse fiber-optic television service.

But a recent court decision has state Attorney General Richard Blumenthal calling on the state Department of Public Utility Control to stop AT&T from signing up new customers.

"AT&T right now is in a kind of regulatory limbo," Blumenthal said last week. "It's providing a service but has no franchise (and) no license to undertake the activity that it is doing."

Late last month, a U.S. District Court judge issued a summary judgment overturning the DPUC's decision allowing AT&T to offer U-verse without applying for a cable franchise.

Blumenthal last week petitioned DPUC to order AT&T to seek a cable license.

But spokesmen for AT&T and the DPUC called Blumenthal's request premature because the telecommunications giant still can challenge the decision.

AT&T's Seth Bloom said the company filed a "motion for reconsideration" Thursday, believing the judge "overlooked or misconstrued several crucial legal and factual matters."

AT&T could appeal the decision, Bloom said, saying the company has no intention of halting expansion of U-verse.

"We're going forward full-throttle," Bloom said.

The DPUC issued a 3-2 decision that U-verse could be offered in June 2006.

"We took the Federal Communications Commission's definition of what constitutes cable television and said 'OK, this is different. You're not a cable company,' " DPUC spokeswoman Beryl Lyons said last week.

AT&T and its supporters touted the decision as a victory for consumers seeking alternatives in a limited cable market with ever-increasing prices. But opponents like the state Office of Consumer Counsel, which challenged DPUC's decision in court, said the DPUC freed AT&T from restrictions that provide protections for consumers.

Blumenthal said he welcomes AT&T's entry into the television field but is concerned AT&T will offer U-verse only in wealthier communities or where it is cheaper to locate the necessary infrastructure. Bloom flatly denies the allegation.

In late December, AT&T began offering packages with as many as 300 TV and music channels in Stamford and Norwalk.

AT&T found some novel ways of advertising, including a specially outfitted ice-cream truck with a flat-panel TV on the side.

In Norwalk, home of Cablevision's Connecticut operations, AT&T unleashed some "stealth" marketing in the form of the fictional "Bobby Choice," a stocky, balding man who claimed to live in the Silvermine section of the city where trees blocked satellite transmissions.

Choice touted U-verse at various nightspots, doling out T-shirts with his grinning image, and claimed on his Web site that "AT&T U-verse is Awesome!" after years of suffering with cable television.

Residents of 33 other towns and cities, including Bridgeport, Danbury, New Haven, Waterbury, New London and Middletown, also can receive U-verse television, Bloom said.

"The intention is to offer it to as many as we can," he said, likening the service to AT&T's digital subscriber line, available in 90 percent of the state.

Lyons said that if AT&T is required to apply for a cable franchise, it "won't happen overnight."

"It (the application) is a foot-and-a-half," Lyons said. "Cable franchise applications are very complex. . . . And if they come in for a cable franchise, everybody in the world will want to put restrictions on it."

So where does this leave current U-verse subscribers?

Bloom said the cable franchise process could take up to a year.

"Our hope would be that there would be no disruption," Bloom said.

Blumenthal said he expected DPUC would require AT&T to maintain the status quo as it goes through the cable franchise process.

Lyons said a potential problem for customers would be if AT&T decided to "fold-up" the U-verse service. She said the company would then be ordered to notify its customers and give them time to decide whether to return to cable or satellite.

"But that's not likely," Lyons said. "I wouldn't be terribly concerned."

Copyright © 2007, Southern Connecticut Newspapers, Inc.