Note: AT&T continues to pursue local franchises in Missouri while also pushing for a statewide franchise.

from: STL Today [1]

AT&T video plan meets with a delay
By Mark Schlinkmann
ST. LOUIS POST-DISPATCH
02/21/2007

ST. CHARLES — A proposal to allow AT&T, the state's largest telephone company, to offer video services in St. Charles ran into a delay Tuesday night at the City Council.

Supporters, including Mayor Patti York, said the proposed video services contract would give residents an alternative to the cable service offered by Charter Communications.

"This is just another opportunity for people to have a choice," York said of the measure, which is sponsored by Council President Bob Kneemiller, 4th Ward.

However, two council members — John Gieseke, 8th Ward, and Mark Brown, 3rd Ward — said they were concerned that the measure would give AT&T a better deal than Charter has under its existing cable franchise agreement with the city.

They said they weren't opposed to AT&T entering the video market but wanted to make sure the contracts were as equal as possible.

The legislation, negotiated by attorneys for AT&T and the city, calls for the city to get a 5 percent fee on gross receipts — the same percentage Charter pays. AT&T also would have to follow similar customer service rules.

Critics, including a Charter official, have complained that AT&T wouldn't be required to provide free video service to schools, libraries, police and fire stations, as Charter must. They also said the proposed agreement doesn't give the city the right to inspect AT&T's records regarding fees owed to the city. The city has that authority with Charter.

AT&T attorney John Medler Jr. said he wouldn't object to adding a provision regarding an audit or a yearly report. He said the AT&T service is offered only to residences.

Medler added that the agreements aren't identical because AT&T has to spend substantial amounts of money nationwide and take financial risks to upgrade its equipment to be able to offer the service.

"If you require a new entrant to live up to every single dot and iota, we can't come in," he said. He said competition would result in improved service and lower prices.

After a lengthy discussion, Kneemiller held up voting on the measure until a later meeting.

St. Charles would be the seventh city in the St. Louis area to approve a video agreement with AT&T. The company also is seeking agreements with more than 100 other Missouri communities.

The company also is pushing in the Missouri Legislature for a bill allowing it to get a statewide franchise covering all communities.

That measure, which was approved Tuesday by the Senate and sent to the House, also allows cable companies to opt out of their existing local agreements.

AT&T's service, called U-verse, would offer many of the same programs as cable but wouldn't work in the same way. Instead of delivering all channels to a home, AT&T would send one channel at a time as a customer selects it from a menu.