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from: Hartford Courant

Connecticut Attorney General Shifts Stance on AT&T TV Service

October 24, 2007
By Mark Peters

After winning a months-long battle that ended with a prohibition against AT&T’s signing up new customers for its TV service, Attorney General Richard Blumenthal on Tuesday said the phone giant should be allowed to resume marketing the service.

Blumenthal reversed his stance against allowing AT&T to sign up new customers for what he called an illegal cable service amid growing political support for the state’s largest phone company.

AT&T has put pressure on regulators and Blumenthal, saying it won’t offer its competitive TV service in Connecticut and will lay off more than 300 employees if a week-old ruling by the state Department of Public Utility Control stands.

Gov. M. Jodi Rell called on the DPUC Tuesday to reverse the ruling, and state legislators are expected to hold a press conference today to argue in favor of the phone company’s position.

“Connecticut consumers need and deserve the benefits that long-awaited and much-needed competition in the cable TV market will bring,” Rell said in a statement.

The DPUC ruled that AT&T had to stop signing up new customers for its U-verse service until the company receives a cable franchise license. The service, which had been available in parts of 40 municipalities, competes with cable by delivering TV programming over telephone lines.

The license would require AT&T to offer the service to all customers in its franchise area, which would be the whole state.

For decades, cable companies have had to provide “universal service” in their franchise areas. AT&T has said that, as a new competitor in the market, it should not have to follow that requirement.

AT&T has appealed the DPUC’s decision to Superior Court. Rell called on the DPUC to regulate AT&T under a new law passed last spring to promote cable competition. In its ruling, the DPUC said that the state law doesn’t apply to U-verse. Rell doesn’t have the authority to order the DPUC to change its decision, a spokesman said.

“I understand the concerns that opponents have expressed about the fact that AT&T would not be required to offer the U-verse service to all households in a given area and therefore not all cable TV customers will benefit from competition,” Rell said. “However, that analysis assumes wrongly, I believe that no other video service operator will ever find it economical to offer such a service.”

Blumenthal said his office isn’t backing off its fight to require AT&T to provide its TV service across the state. It will continue to push in federal and state court for AT&T to provide the TV service as widely as possible.

However, the attorney general, who cheered the DPUC decision last week, struck a more conciliatory tone Tuesday, saying the two sides have to reach a compromise to ensure that AT&T provides competition to cable. His office will file a request with the DPUC to place a stay on its decision so that AT&T can continue to sign up customers.

“We want to do everything possible to find common ground because there are elements of common interest here,” Blumenthal said.

AT&T, in a statement, dismissed the idea of a stay, saying it is confident that the state court will act quickly to allow the company to continue offering U-verse in Connecticut. A stay at this point would only confuse customers further, the company said.