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In a case closely watched by politicians and the telecom industry, the 9th U.S. Circuit Court of Appeals ruled Thursday that the city of Portland, Ore., could not require AT&T to open its broadband Internet network to competition. The ruling means that municipal franchises cannot force cable owners to share their cable infrastructure with competitors. As a result, cable companies can choose which Internet service providers are available to consumers with high-speed cable modems. The ruling is a boon for AT&T and Time-Warner Inc., which together own 80 percent of the nation’s cable infrastructure. The ruling drew positive response from AT&T, swift criticism from telecom attorneys and a vague response from the Federal Communications Commission. Oddly, Judge Sidney Thomas’ opinion begins by saying the 9th Circuit’s ruling would have limited impact on Internet law. “The parties, and numerous amici, forcefully urge us to consider what our national policy should be concerning open access to the Internet. However, that is not our task, and in our quicksilver technological environment it doubtless would be an idle exercise,” Thomas wrote. “Like Heraclitus at the river, we address the Internet aware that courts are ill-suited to fix its flow.” When AT&T merged with TCI Inc., the city of Portland tried to force AT&T to allow several Internet service providers access to its high-speed cable lines as a condition for approving the deal. AT&T had an exclusive agreement with Excite to provide its @Home service and balked at Portland’s ordinance, filing suit in a U.S. district court in Oregon. The district court ruled for Portland, ruling that AT&T couldn’t dictate which Internet service providers consumers had to use, just as owners of telephone lines aren’t allowed to dictate which ISP their telephone customers use. But the 9th Circuit’s reversal threw telecom attorneys into everything from a rage to wistful eulogies for the open access movement. “I get the feeling that they don’t even read the stuff that’s in front of them,” said Robert Fellmeth, director of the Center for Public Interest Law in San Diego, Calif. “Basically, it’s the AT&T brief.” Although AT&T spokepersons said they were pleased with the ruling, they may not be in the long run. The court also held that under the Telecommunications Act of 1996, broadband Internet access is telecommunications, and not standard cable delivery, noting the two-way nature of Internet communications. “Surfing cable channels is one thing; surfing the Internet over a cable broadband connection is quite another,” Thomas wrote. Thomas’ ruling may eventually force the FCC to get involved in the cable-service provider debate it had previously avoided. It may also subject AT&T’s broadband system to taxes it does not have to pay as a pure cable provider. The FCC released a three-paragraph statement after the ruling was released. “We share the goal of municipalities that consumers should be able to point, click and choose their Internet service provider,” FCC chairman William Kennard said in the statement. William Freedman, a telecom attorney in the Washington, D.C., office of Morrison & Foerster, said the opinion may be the death knell of the open access movement and was concerned that large cable conglomerates would control critical access points to the Internet. “The wind has gone out of the sails of the open access movement. And I fear that this will be the nail in the coffin,” Freedman said. Several municipalities filed amicus briefs in the case, including San Francisco, New York, Atlanta, Baltimore, Boston, Los Angeles and San Jose, Calif. Industry watchers say broadband, high-speed access to the Internet is the future, as streaming video and music come into increasing use. Some are concerned that a cable provider would have no incentive to offer streaming movies over the Internet, for example, if it will potentially affect their normal cable business. The decision also throws several San Francisco-area pieces of legislation into doubt. San Francisco Board of Supervisors President Tom Ammiano and Supervisor Michael Yaki have both introduced open access bills recently. The San Francisco City Attorney is studying the opinion for its effect. “It is not a thoughtful opinion and it should be appealed,” Fellmeth said. “The Supreme Court has got to take this case. There’s no way they can let this stand.”

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