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AT&T wins San Francisco cable access showdown

AT&T gains the San Francisco cable franchise from TCI without a requirement to open the system to rival Internet services, winning a 9-to-2 vote of the Board of Supervisors.

SAN FRANCISCO--City officials today stopped short of requiring AT&T to immediately open its cable networks to competing Internet access providers--something two other municipalities across the country already have done.

On a 9-2 vote, the Board of Supervisors granted the transfer of the city's cable franchise to AT&T and approved Ma Bell's merger with Tele-Communications Incorporated with some minor conditions, including Net access for libraries. The go-ahead means TCI's local cable customer base will become customers of AT&T, the nation's largest long distance voice and cable TV company.

Although the board decided against imposing open access requirements today, the decision still gives San Francisco the right to force AT&T to open their cable networks to competitors in the future. Should Portland, Oregon, area officials succeed in their pending lawsuit with Ma Bell over cable access, San Francisco will have the opportunity to revisit today's decision.

The Portland case is now in a federal appellate court, with both sides publicly expressing confidence they will prevail.

Today's vote ends an inconclusive skirmish in the high-profile battle over cable open access. Opponents of AT&T want the company to share access to its recently acquired cable networks so they can offer their own high-speed Internet services. AT&T charges that there is little incentive to invest in its networks if it has to share with competitors.

San Francisco's move follows word that AT&T would sue Broward Country, Florida, a municipality that voted recently to require AT&T to open its cable network to competitive Net access providers.

But in California, cable industry executives heralded the vote as a win.

"[AOL and GTE] dumped millions of dollars here on lobbying and advertisements and they've even lost in San Francisco which has a reputation for open mindedness," said Milo Medin, chief technology officer for Excite@Home, the leading cable modem service and an AT&T partner.

Telecommunications industry watchers have focused on San Francisco for weeks as the city became the latest to weigh the controversial cable access issue. Because of the city's liberal political bent and perceived history of problems with the local cable provider, some observers believed San Francisco was set to join Portland and Broward County as a supporter of open access.

Open access laws seek to allow competitors to pay cable operators to use their cable TV wires, which are capable of delivering the Internet at fast speeds.

San Francisco city officials considered a complicated set of amendments, including one by board president Tom Ammiano that would have required an open access mandate if Portland wins its case in the 9th U.S. Circuit Court of Appeals. Ammiano's measure failed.

Supervisor Michael Yaki, who after 40 minutes of negotiations with AT&T and city staffers introduced the adopted amendment, reminded his colleagues that cable modem service is not yet available in San Francisco and that clearing the way for the required network upgrades was the best course of action.

"We retained the ability to impose open access without doing so now," Yaki said. "Once this gets up and running we can take another look."

But open access supporters, including ISPs, local phone companies, and Ammiano (who blasted the adopted version as "watered down") left City Hall disappointed.

"What they adopted is a permissive rather than a mandatory device," said GTE public policy executive John Raposa, referring to legislative language which suggests that San Francisco "may impose" rather than "shall impose" open access under certain circumstances.

Representatives for the Bay Area Open Access Coalition, an ISP and local phone company-backed group, said they will consider spearheading a city referendum drive to suspend the board's decision.

The board's decision could be overturned with roughly 10,000 signatures of registered voters, according to representatives for the local open access group. The Bay Area Open Access Coalition already has submitted more than 15,000 citizen signatures to San Francisco supervisors in recent weeks and believes it could gather enough signatures for a referendum.

The city did vote unanimously today to support open access in a separate resolution, which directs city staff to submit a report with suggestions on how to impose open access by December 15. But open access supporters said the resolution was non-binding and does not go far enough. As part of that resolution, however, San Francisco will file a brief supporting Portland officials in their federal court case.

The four-hour-long meeting was highlighted by 60 minutes of public testimony from concerned citizens; economic development groups; speakers representing minority, low-income, senior, disabled, and union groups; and several Excite@Home employees.

At one point, too many onlookers in the packed legislative chambers were blamed for a fire alarm that sounded briefly during the proceedings.