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Note: AT&T has struggled with it's roll-out of huge telco boxes. It seems AT&T's U-verse is 'your world delivered' in the form of a hulking gray box on the public 'right of way' in front of your home. In the competition with cable, AT&T wins for the biggest boxes and most number of lawsuits they've filed over where they can put them.

from: Journal Sentinel

Dial T for telecom battle
AT&T's boxes, TV fees among issues

By MARIE ROHDE
mrohde@journalsentinel.com

Posted: Jan. 28, 2007

In Shorewood, the quiet block where Joe Dean lives is caught in a battle of telecom giants, and he doesn't like it.

It began in July, when a tan metal cabinet the size of a refrigerator was plopped down in the right of way in his block, the 4400 block of Stowell Ave. The cabinets house the equipment that AT&T, the world's largest telecommunications company, needs to enter the subscription television market, improve its Internet services and provide computer-linked telephone service - would put them in direct competition with Time Warner Cable.

"Those boxes are an abomination," Dean said of the cabinets, noting that AT&T's competitors don't need such equipment. "We called Village Hall, and they said it was just an upgrade in phone service."

The metal cabinets that are springing up all over the Milwaukee area - an additional 16 are planned for Shorewood alone - are part of AT&T's Project Lightspeed, a $4.6 billion effort to bring new services to 13 states.

For AT&T, it's critical to get new products off the ground quickly, because officials say the company has lost about 30% of its telephone customers since 2000.

Yet AT&T faces big challenges from its main competitor, Time Warner, and from Milwaukee and other municipalities that want upfront payments for the right to install the service.

Here's how the battle is shaping up, with new details on AT&T's plan:

AT&T vs. Time Warner: AT&T says its new television service, called U-verse TV, will offer more high-definition television channels, among its services. The product is not yet available in Wisconsin, but it is available in some markets around the country. A demonstration site for the service is being developed in Brookfield.

U-verse will produce better service and save consumers money, spokesman Jeff Bentoff says. AT&T's goal is to be able to offer service to at least half of the customers it serves in Wisconsin by the end of 2008, he said. It is not expanding into areas where it does not currently provide telephone and Internet services.

The boxes that Dean and many of his neighbors object to are integral to bringing U-verse to area homes, Bentoff said. The cabinets house fiber optics technology that connects to copper wires that bring the high-speed computer service to individual residences. The computer service includes television and will one day include telephone service.

Bentoff said that Time Warner Cable service fees in the Milwaukee area increased 61.9% between 1999 and 2007; Time Warner notes that it offered 54 channels in 1999 and more than 350 now.

Celeste Flynn, a Time Warner spokeswoman, said her firm welcomes competition but added, "AT&T is trying to circumvent present laws to dominate the marketplace not to provide competition."

AT&T vs. municipalities: Here's where money comes into play. AT&T maintains that it is exempt from local franchise regulations that cable companies have agreed to.

Those agreements require the cable company to give local municipalities 5% of its fees and provide 1% more to support public access channels. That means Milwaukee got about $3.7 million in cable fees in 2006, while smaller communities, such as Shorewood, got less. The cable firms would argue that they should not have to pay those fees if a competitor such as AT&T does not. The result may be higher taxes for property owners if the franchise fees weren't paid.

Bentoff said AT&T would be willing to make comparable payments as long as they are not part of a franchise agreement.

Rich Eggleston, a spokesman for the League of Wisconsin Municipalities, said AT&T's fee agreements in other parts of the country have been for three years, much shorter than the cable franchise agreements.

Lawsuit issue: The City of Milwaukee last month became the first in the country to file a lawsuit against AT&T to force the company to enter into a franchise agreement. Anita Gallucci, a Madison lawyer representing more than 30 other state communities, said she will file legal documents in support of Milwaukee's position within the next two weeks.

"We're all interested in maintaining our authority over the public right of way and the franchise agreements," Gallucci said.

The metal boxes: Gallucci questioned the need to have the boxes on public land, noting that Verizon, a cellular telephone service also entering the competition, is running fiber optics directly to the homes.

"AT&T wants to use the existing copper wire, and it's just an effort to save money," Gallucci said.

Communities also are concerned about the placement of the boxes in the public right of way

Bentoff said AT&T obtained permits before installing the boxes. In Whitefish Bay, the village refused to issue permits unless AT&T agreed that it would not be for video service; AT&T did not accept the permit because of the conditions.

Eggleston noted that AT&T has filed lawsuits against communities in other parts of the country that denied permits for the installation of the cabinets and has also sued communities that have tried to impose moratoriums. Kenosha imposed a moratorium but has not yet been sued.

Bentoff said that all the issues being raised can be resolved and that the bottom line is that, eventually, competition is coming and that it will bring lower prices and better services.

"Wisconsin could be among the first states to get the benefits of this competition," Bentoff said. "We should let the consumers decide."

AT&T: Great Expectations
AT&T's new U-verse video services were a topic during a national conference call with analysts Thursday. AT&T Chairman Ed Whitacre said the services, which are delivered using technology known as Internet protocol television, are being improved in preparation for wider availability. Right now, U-verse is in limited markets. "There has been a lot of talk about 'Does this stuff work?' " Whitacre said. "It works, and it works well."
- Cox News Service

Paying Up
Municipalities want AT&T to cough up fees for television service the same way cable companies do. Here are some examples of fees that Time Warner Cable paid to communities in 2006:
Bayside: $55,200
Brookfield: $377,087
Milwaukee: $3,661,423
Shorewood: $125,783
Thiensville: $20,416
West Allis: $555,085
Source: Time Warner Cable
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