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Publication Date: Friday, July 05, 2002

City says cable customers still waiting for AT&T's money City says cable customers still waiting for AT&T's money (July 05, 2002)

Council will vote on cable merger later in month Council will vote on cable merger later in month (July 05, 2002)

By Bill D'Agostino

AT&T has not paid settlement credits it owes Mountain View cable customers, according to city officials. Representatives from the city and the telecommunications juggernaut were planning to meet on Wednesday as a result of negotiations surrounding AT&T's planned merger with Comcast.

In February of 2001, a lawsuit the city filed against AT&T Broadband was settled when the cable operator agreed to provide $540,000 in credit to standard basic service subscribers in the city.

In the lawsuit, Mountain View stated that AT&T did not meet a July 1999 deadline in upgrading its cable system.

AT&T disagrees. "It is still an issue that both sides are negotiating," said Spokesperson Andrew Johnson.

Until recently, most small cities did not attempt to take on AT&T. "They are the 800-pound gorilla," said City Attorney Michael Martello. "It was a huge step for Mountain View. They're big enough to crush you."

However in recent months, cities nationwide have begun suing AT&T for customer service violations, one of the few areas in which cities have some say. Most of the codes regulating cable companies are federal laws.

Since AT&T's merger with Comcast is contingent on approval of cities across the country, local cities have a rare opportunity to try to get some improvements in service while they consider approving the merger. Mountain View's city council was scheduled to vote on the merger on June 25. City staff had recommended denying the merger - which, Martello said, could open the city to litigation on grounds that the city unreasonably refused approval -- but at the last minute AT&T agreed to a one month extension to work out differences between the two sides.

Council member Rosemary Stasek is doubtful the city has much chance to effect change. "I'm not putting a lot energy into thinking 'oh we're going to be able to get something,'" she said.

AT&T serves approximately 18,000 cable subscribers in the city. It essentially have a monopoly on cable service, but only because no other company is interested in moving in. "No other cable operator has come to the city with an application," said to Deputy City Manager Linda Forsberg.

That frustrates Stasek, who hoped that 1984's federal law deregulating cable would lead to greater options, especially with the Bay Area's dense population of television devotees. "If it's going to happen anywhere, it should be happening here," she said.

Customers in more than 9,600 of the nation'a 10,000 cable markedts have no choice of cable providers. Mergers, becoming more and more commonplace in the telecommunications world, are part of the reason why. They also tend to increase cost while decreasing choice and customer satisfaction.

The merger between AT&T and Comcast represents the union of the nation' first and third largest cable companies, respectively. According to the Federal Communications Commission, cable prices increased 7.5 percent last year, well above the inflation rate of 2.7 percent.

The city council will vote to approve or deny the merger at its July 23 meeting in city hall.


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