AT&T going after Comcast's cable market (San Jose) (1 Viewer)


Thread Starter
Stand against retrans!!!
Supporting Founder
Apr 18, 2005
DeKalb County, AL

What happens when a phone company tries to offer television service where cable TV already operates? A turf war. And in California, there's a battle under way between AT&T, which is trying to install a new TV service that runs over the Internet, and Comcast, one of the dominant cable providers in the state.

AT&T has been negotiating with several cities over the past year -- including San Jose -- to install its fledgling TV service, Project Lightspeed. At a press conference Wednesday in Sacramento, company officials said progress has been hampered by decades-old laws that require TV providers to strike franchise agreements with each community where the service will be offered. AT&T is pushing for a new law that would require only statewide franchises.

But Comcast and other state cable providers say AT&T is trying to get around perfectly good laws, and that the company's Lightspeed service won't provide high-quality TV service to poor communities.

The conflict is emblematic of the rapidly changing world of telecommunications, where phone, cable and even Web companies like Google and Yahoo are scrambling to offer consumers phone, Internet and video services. Federal, state and local lawmakers, meanwhile, are scrambling to figure out the best way to regulate these services.

Franchise agreements

At the center of this dispute are franchise agreements, which are designed to ensure that local communities get a share of revenues from television providers. Often such agreements require cable companies to upgrade technology in poorer areas, where the companies make less money, as well as affluent ones, where households can afford premium services. They also guarantee several public-access channels.

AT&T officials hope a bill in the works by state Assembly Speaker Fabian Nuñez, D-Los Angeles, will allow the company to strike statewide franchise agreements instead of local ones. The Nuñez bill, AB 2987, however, does not yet describe any specific changes to the law.

``One of the things that Californians have been lacking is a choice in their television provider,'' said Ken McNeely, president of AT&T's California operations. ``That is something that has been the result of a regulatory mechanism that's been in place since the 1960s. That's something that we are excited might be changing.''

AT&T hopes to invest $1 billion in California to upgrade phone lines and install fiber-optic wires to bring the Lightspeed service over the next three years.

McNeely said a statewide franchise would speed the outlay of Project Lightspeed to consumers, yet would still grant local communities a 5 percent cut of revenues, as well as community-based channels. Increased competition for television would bring down prices for consumers, McNeely said.

But Dennis Mangers, president of the California Cable and Telecommunications Association, which represents the state's cable providers, denied AT&T's claim that cable has enjoyed a virtual monopoly on TV services.

``We've lost 25 percent of subscribers to satellite,'' he said. ``We already know competition.''

Comcast spokesman Andrew Johnson said Lightspeed wouldn't bring consumers anything they can't already get from Comcast.

``AT&T is spending years and $1 billion to imitate a network Comcast has already built,'' he said. ``We've seen nothing in their product roadmap that we can't exceed.''

Mangers accused AT&T of planning to install Lightspeed mostly in affluent areas of the country in a practice known as redlining. The same accusation was made last April by a Texas cable group that told the Associated Press it had seen an internal AT&T (then SBC) memo promising to bring Lightspeed to 90 percent of ``high value'' homes and 5 percent of those of ``low value.''

McNeely vehemently denied the accusation.

``This claim of redlining is a red herring,'' he said. ``We have every intention of deploying a product to all consumers regardless of income and race. It is an issue that is deeply, deeply of concern to all involved.''

While Mangers swears by the franchise system, San Jose's efforts to strike a long-term agreement with Comcast have dragged on for more than six years. Changes in cable-company ownership, disputes about community services and technological delays have brought the dispute as far as federal court. The case is currently in mediation, and Comcast has been operating on a month-to-month franchise.

San Jose's negotiations with AT&T for Project Lightspeed, which began in 2005, have hit some snags as well. AT&T has told city officials that it is comfortable with a standard cable-like franchise, as long as it is ``within the framework of a non-franchise agreement,'' according to a city staff report.

`Walks like a duck. . .'

The idea of creating an agreement that operates like a franchise but is not called a franchise left some city council members confused.

``I'm trying to understand the issue that we need to resolve,'' Councilman Forrest Williams (District 2) said at a meeting earlier this month. ``There's a saying that if it walks like a duck and quacks like a duck, it's a duck.''

Discussions between the city and AT&T are continuing. Nuñez continues to develop his bill in Sacramento, and on a national level, the U.S. Congress is weighing several bills that propose major changes to telecommunications regulation.


SatelliteGuys Pro
Jun 22, 2005
South of Heaven
They are both so 'evil' it's hard to root for one or the other. :\

Well, since AT&T is buying out our Bellsouth, that means we might get FIOS (since BS was going to go adsl2 instead).

So..... go AT&T!

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