Connecticut’s Department of Public Utility Control has given the thumbs up (by a vote of 3-2) to AT&T’s IP video saying that it is not subject to legacy cable franchising requirements in the state. The PUC agrees with Ma Bell’s contention that video over copper is just another form of data, and it is two-way video, and very different from traditional cable and thus does not fall under legacy franchise rules. This clearly is a big win for Ma Bell, and Connecticut has the right demographic profile to make T’s IPTV service work.

This bothers Connecticut Attorney General, Richard Blumenthal, who is quoted by Connecticut Post as saying, “Without government regulation and a universal service requirement, IPTV providers will cherry-pick the wealthiest and most accessible consumers, leaving the rest of Connecticut with no choice and higher costs.” The ruling can be appealed by him and others, and they have 45 days to do so.

The franchise reforms at a national level are also gaining momentum, thanks to some well placed greasers (oops I meant lobbyists.) UBS Research analysts say, keep an eye on the COPE (Communications Opportunity, Promotion and Enhancement) bill – this could change the game a little. It basically has an amendment built in for preserving network neutrality, and also lacks any special build out requirements for new video providers, aka the Bells.