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from: Stamford Advocate

Regulators order AT&T to apply for cable TV license for 'U-verse'

Associated Press
October 15, 2007

NEW BRITAIN, Conn. -- State utility regulators on Monday ordered AT&T to get a cable television license for the Internet protocol-based TV service it is currently providing in Connecticut.

Department of Public Utility Control commissioners said a recent ruling by a federal judge made it clear that AT&T's "U-verse" constitutes a cable television service, and the company is operating it without proper authorization.

Commissioners unanimously rejected the company's application for a "video franchise" certificate, which state Attorney General Richard Blumenthal said would have allowed AT&T to run "U-verse" under regulations that are less strict than those for cable television. The DPUC ordered AT&T to apply for a cable TV license no later than Dec. 31.

The agency, however, is allowing AT&T to continue offering "U-verse" to existing customers until a decision is made on the cable television license. The company will be prohibited from signing up new customers and installing new equipment related to the Internet protocol service while the cable TV application is pending.

AT&T vowed to appeal the ruling in state Superior Court on Tuesday. The company said that if the ruling stands, it will be forced to eliminate more than 300 jobs in the state related to "U-verse," not hire or eliminate about 1,000 other jobs in Connecticut and disconnect the more than 7,000 households in the state that currently subscribe to the service.

The company also said the Connecticut ruling would be the first in the country to force it to obtain a cable franchise for "U-verse," and would harm consumers by reducing competition.

Blumenthal, however, called the DPUC ruling a "landmark victory" for consumers because it would ensure "real" cable competition throughout the state.

"Plainly and simply AT&T is illegally operating a cable service without a franchise, required to provide real competition and a level playing field," he said.

Blumenthal said that if AT&T was granted a video franchise, it would have been allowed to provide cable TV service to a select number of customers in certain parts of Connecticut without requirements for consumer protection or service quality.

He said the cable television license rules require basic service packages including local, governmental and educational programming.

AT&T officials strongly disagreed with the DPUC and Blumenthal.

The company said agency commissioners contradicted a law approved by Gov. M. Jodi Rell and state lawmakers earlier this year that was intended to make it easier for video providers like AT&T to enter the market and compete against cable companies.

"In making this ruling, the DPUC ignored both the spirit and the letter of a brand-new consumer-friendly law and is protecting the cable monopoly," said Ramona Carlow, who oversees regulatory and external affairs as AT&T's state president.

AT&T says "U-verse" is available to more than 150,000 households in more than 40 cities and towns across the state. The service is provided over the company's telephone wires and is set up like traditional cable TV service.

John Emra, an AT&T regional vice president, said the DPUC's decision "is bad for consumers who are finally getting a choice."

He said the company is going to immediately stop its $336 million investment in video service in Connecticut.

State Sen. John Fonfara, D-Hartford, and Rep. Stephen Fontana, D-North Haven, who wrote the new video providers law, urged the DPUC to approve AT&T's video franchise.

"AT&T is the type of applicant that we foresaw applying when we passed (the law) so overwhelmingly, the type of applicant the governor likely sought to encourage to apply by signing the legislation into law," the lawmakers wrote in a letter to the DPUC.

Copyright © 2007, The Associated Press