AT&T wins broadband case in Portland, Ore.

AT&T survived perhaps its biggest challenge last week by winning a case

in the 9th U.S. Circuit Court of Appeals that seemingly upholds the company's

right to control its cable broadband plans. AT&T's opponents, however,

seem to think Ma Cable has only painted herself into a corner.

The whole thing started last summer when the city of Portland, Ore., demanded

that AT&T allow competing Internet service providers to run their services

on AT&T's new cable plant. This clearly scared AT&T because it invested

billions to buy cable networks as a way to pipe its broadband services into

homes. The telecom giant mounted an aggressive defense by threatening to

sue any city that requested open access, and promised delays in upgrades

to a city's cable service if the city considered an open-access provision.

At times, the open-access debate has been one of the more farcical examples

of corporate activism. Both sides hired expensive lobbyists, and both sides

went to great lengths to get private citizens in on the debate, mimicking

grassroots efforts.

For example, during the public debate in San Francisco, open-access supporters

managed to round up a half-dozen citizens and small-business people to speak

out against the resolution. One speaker tried to cast open access as a gay-rights

issue, while another said an AT&T monopoly would be a blow against San

Francisco's multicultural heritage.

The resolution of the Portland case, which appeared to be a decisive victory

for AT&T, is by no means the end of the fight. Both sides are promising

to battle harder than ever for their position. While AT&T won this case,

open-access proponents declared a decisive victory. "The worst thing you

could say about Portland is that they lost the battle, but they won the

war," said Dave Baker, vice president of law and public policy with EarthLin

The reasoning in the pro-open-access camp is that even though the court

decided that Portland had no right to try to force AT&T to open its

cable plant, the decision now makes the Federal Communications Commission

the governing body responsible for cable-broadband services.

"FCC inaction so far has, in effect, meant that the cable systems have been

closed to competition," Baker said. "But now it's back in their court, and

since they've supported open access in principle, I can't imagine them backing

down. They have to act."

AT&T is confident that the FCC is not going to do anything to change

the status quo. "I think the fact that our opponents saw the lower-court

decision as a victory and now see this as a victory is odd," said Mark Rosenblum,

AT&T's vice president of law. "You can't have it both ways. They're

looking for any opportunity to keep this going.

AT&T believes that the FCC will take its side in the matter for a couple

of reasons. First, AT&T has offered to allow open access on a cable

plant in Boulder, Colo., though competitors complain this gesture is too

little, too late. Second, AT&T simply thinks that the FCC will continue

to let the issue slide. "The FCC has thought for years that they had the

right to regulate this industry, and they declined to do so," Rosenblum said.

The case was supposed to resolve a thorny issue once and for all. Only the

FCC can settle it now.