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Date: Tue, 26 Oct 1999 16:56:16 -0400
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Subject: GTE sues for AT&T network access
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http://www.post-gazette.com/businessnews/19991026internet1.asp



GTE Corp. filed suit against  AT&T Corp. in federal court in 
Pittsburgh yesterday in order to gain access to AT&T's network and 
provide high-speed Internet access over its television cables.

The suit makes the city the latest battleground in a fight that has 
stretched across the country, from the Washington, D.C., halls of the 
Federal Communications Commission to local squabbles in Portland, 
Ore.

The lawsuit comes as Internet service providers (ISPs) in Western 
Pennsylvania lobby Pittsburgh City Council to force AT&T to give them 
access as part of the city's renewal of AT&T's cable television 
franchise agreement.

At issue is who will have a crack at the high-speed data stream that 
AT&T can provide over the cables it acquired when it purchased 
Tele-Communications Inc. for $54 billion earlier this year.

AT&T Cable customers in certain areas can receive "always-on" 
Internet service that can be dozens of times faster than conventional 
dial-up modem service. But AT&T requires those customers to use 
@Home, an Internet access service in which AT&T has a controlling 
stake.

GTE, America Online and other ISPs, such as Pittsburgh's Stargate 
Industries and Telerama, want a model akin to the telephone system: 
Bell Atlantic telephone customers can use their phones to access Bell 
Atlantic's own ISP, or any other ISP of their choosing.

"The Internet has exploded because of competition," said William P. 
Barr, GTE general counsel. But AT&T Cable customers "don't have a 
choice. They're forced to accept @Home as their only on-ramp to the 
Internet."

GTE's suit charges that AT&T's exclusive arrangement with Excite@Home 
is a violation of federal antitrust laws. The suit also names 
Excite@Home and Comcast Corp., a Philadelphia cable company provider 
which is part-owner of Excite@Home, based in Redwood, Cal.

AT&T and Excite@Home officials criticized GTE, saying the company has 
not allowed competitors adequate access to its own telephone network 
as required by the 1996 federal Telecommunications Act. Comcast 
officials could not be reached for comment. But cable industry 
executives have complained loudly in the past that since they are 
spending billions to upgrade cable systems in order to provide a data 
link, they should not be forced to give access to their 
competitors.

Until now, GTE has worked the fight from behind the scenes, lobbying 
officials at local, state and federal levels to take on the cable 
companies. The Texas-based telecommunications company persuaded 
officials in Portland, Ore., and elsewhere to require access as part 
of their local cable agreements. A bill is currently pending in 
Harrisburg that would force cable companies to give access to 
competing Internet providers.

GTE ran a trial program with America Online in Florida that was 
intended to undercut AT&T's argument that accommodating competing 
ISPs on the cable network would be a technical nightmare.

But GTE, which provides Internet service to 554,000 customers and is 
a national Internet "backbone" provider, has had little luck at the 
FCC. The commission has declined to wade into the fray except to say 
regulation of cable Internet service is a national issue. FCC 
Chairman William Kennard believes that allowing individual 
communities to create their own rules would be disastrous.

After AT&T filed suit in Oregon, a federal judge ruled against the 
company. AT&T's appeal of that decision is to begin Monday.

Fear of a legal tussle with AT&T was part of the reason Pittsburgh 
City Council members backed off from forcing the access issue when 
the council signed off on the TCI purchase earlier this year. But 
local ISPs are pushing council to take up the issue as it negotiates 
a renewal of the company's franchise agreement, which expires 
Sunday.

GTE and representatives of the City Council lobbying effort said the 
two moves are unrelated.