AT&T Dealt Setback in Conn. IPTV Effort

In a video franchising reversal of fortune, a U.S. Federal Court overturned a year-old decision by Connecticut regulators that enabled AT&T Inc. to deploy its U-verse IPTV service in a method faster than if it were classified as a cable service.

The state’s regulators decided last June that the U-verse video service was not covered under the federal government definition of cable service. This latest action means the telco now is subject to the country’s Cable Act, and has to apply for local franchises for its IPTV service.

The June 2006 decision by the state’s regulators, which AT&T called progressive telecom policy at the time, quickly drew fire and lawsuits from cable operators, such as Cablevision Systems Corp., who already offer video services in the state.

AT&T says it is reviewing the latest decision and considering its legal options. “Obviously, we agreed with the original decision that was the subject of this case,” said a spokesperson for AT&T, adding the telco already is offering U-verse to customers in parts of more than 20 cities and towns, “and [we] look forward to continuing our aggressive expansion in the months to come.”

The full impact of the latest decision is unclear as the Connecticut state legislature last month passed — and the governor signed into law — a video franchise reform bill that lifted some requirements from AT&T and still maintained U-verse is not a cable service.

AT&T notes that the latest court case — and the state regulators’ decision from 2006 — was based on Connecticut law that has changed with the enacting of the video franchising reform law. “This new law paves the way for AT&T and any other companies to provide a choice to consumers,” added the spokesperson.

In the wake of last year’s ruling by Connecticut state regulators, AT&T outlined its plan to invest more than $336 million to expand DSL availability and to build the network that will provide the company's suite of U-verse services, which include IP video, voice and high-speed Internet access services.

Connecticut is merely one of several states, in which AT&T has argued its IPTV offering is not a cable service, and it should not be subject to existing regulation that cablecos have relied on for years.

Control of video franchising has been a red-hot topic this year with seemingly nobody happy. Municipalities were angered by the FCC’s video franchising ruling, which established a national policy and was finalized in March. They organized and filed lawsuits in several states in early April.

AT&T Inc. www.att.com
Cablevision Systems Corp. www.cablevision.com

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