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from: The Day

AT&T Asks Court To Reconsider 'U-verse' Decision

By Patricia Daddona
Published on 8/14/2007

AT&T has asked the U.S. District Court in New Haven to reject a recent federal opinion that finds the same rules for cable programming apply to a new video product offered by the phone company.

At the same time, one of the plaintiffs in the case, the state's Office of Consumer Counsel, has asked Judge Janet Bond Arterton to halt AT&T's acceptance of its new “U-verse” interactive video technology until it obtains a cable franchise license and to direct the state Department of Public Utility Control to require the company to take that step immediately.

Last month, the judge ruled in a summary judgment in federal court that U-verse must be subjected to the same regulations as conventional cable. The opinion, if it becomes a final ruling, would require AT&T to get a cable franchise just like other cable providers.

Arterton's judgment has the effect of potentially shooting down a 2006 decision by the DPUC, which had said AT&T was not required to seek a cable franchise for its Internet protocol television service, since it was not the same as conventional cable, but rather relied on two-way interaction between the company and the subscriber.

Arterton said, however, that federal law pre-empts the state's interpretation. Although AT&T uses two-way delivery of services, AT&T still delivers prepackaged programming to all subscribers, so subscriber interaction “is the same as that involved in traditional” cable programming, she wrote.

In its request to be heard again, in writing and orally, AT&T argues that the judge erred factually and as a matter of law, in part by failing to take into account that the new video service is capable of providing — and “in time” will enable — features and functions that subscribers can use to customize the type of video content they receive.

The distinction makes AT&T's service “fundamentally” different than traditional cable service, the telecommunications giant argues.

AT&T describes U-verse as interaction over a corporate Internet network that enables a person's TV to communicate and work with other Internet-driven devices. For instance, a cell phone might be used to set the recording time for a digital video recorder, or a subscriber might display ball-game statistics without waiting for a program producer to do it.

The court also mistakenly decided, AT&T contends, that U-verse is not a two-way transmission and that “interactivity must be visible to the subscriber” to count as interactivity, an interpretation the company claims is nowhere to be found in legislative language or history governing cable franchises in Connecticut, or in the Federal Communication Commission's interpretations.

The cable company also provided the court with a “status report” on recent changes in Connecticut law regarding cable franchises. A new law intended to encourage competition among video service providers requires new providers like AT&T to get a certificate of video franchise authority, the company states, asserting that the law was written with specific regard for AT&T.

“Once (the judge) evaluates the information we submitted, we're eagerly anticipating her decision on that,” said Adam Cormier, a spokesman for AT&T.

But William Vallee Jr., lead attorney for the state's Office of Consumer Counsel, said the judge's opinion “is pure law” and correctly interprets what existing federal law means.

“There's nothing new here,” Vallee said of the motion for reconsideration. He also points out in a status report for the plaintiff that the state certificate does not become effective until Oct. 1. “Only a clear, unambiguous order from this Court can ensure ... compliance,” he wrote.

Last week, Attorney General Richard Blumenthal asked the DPUC to force AT&T to apply for a franchise license, but DPUC spokeswoman Beryl Lyons said no action could be taken until any appeal period on a final ruling expired. Lyons was not available for comment late Monday.

“AT&T's request for reconsideration is without basis in law or fact,” Blumenthal said, “a blatant delaying tactic to forestall state licensing and regulation of its Internet television service.”

p.daddona@theday.com