Is AT&T a Cable Company?

Ah, how times change. AT&T (T), the company that used to be affectionately known as Ma Bell, is caught in a legal tussle with the state of Connecticut over the rollout of its U-Verse IPTV service, and at the heart of the dispute is whether AT&T is classified as a cable operator. If so, it has to follow strict guidelines that include making U-Verse accessible to everyone in the state before turning the service on.

Complicating the issue is the fact that on Oct. 1, a new state law went into effect that created an “Internet-based video service” designation. AT&T claims it falls under this “video service” classification and is therefore not subject to the same rules as cable companies, and that even if it was previously classified as a cable company, under the new law, it isn’t anymore.

Officials including the state’s Attorney General, its Office of Consumer Affairs and a U.S. District Judge have piled on against AT&T, all of them saying U-Verse makes AT&T a cable company. The state’s Department of Public Utility Control (DPUC) had said that because of the two-way nature of U-Verse, AT&T was in fact a video service — but late today the DPUC apparently reversed its decision and rejected AT&T’s application to continue to provide U-Verse in Connecticut.

U-Verse is currently available to 135,000 homes in 40 communities in Connecticut, but won’t divulge how many subscribers the service has.

Another issue at stake in this case is over local access programming. The U-Verse system does not give public access a dedicated channel as cable is required to, and the costs associated with being included on the service could be prohibitive for many local access programmers.

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