Court Ruling Screws Telcos, Boosts Cable

A federal court made things a lot stickier for AT&T as it builds out its “U-verse” Internet-based television network. Reuters reports that a U.S. District Court in Connecticut has decided to lump IPTV in the same legal category as cable TV, reversing a previous decision by a state commission. This forces telcos through an expensive, obnoxious town-by-town dance to get local cable franchise licenses, the results of which rarely benefit consumers. (Nevermind that cable companies skip this kind of legal hoopla when they go after phone companies’ customers with Internet phone offerings.)

It’s not clear if AT&T could appeal the ruling, and we couldn’t immediately reach a rep for comment. Either way, this is a big win for cable companies like Time Warner Cable and Cablevision, which love to stall telco TV installations with useless red tape.  It’s also a loss to consumers who must now wait indefinitely for meaningful TV competition and the (potentially) lower prices it is supposed to bring…

I covered a few of these negotiations in Smithtown, N.Y. last year, as Verizon went through the motions to sell TV in the Long Island burg. From my article:

It could be the setting for a sitcom. Or perhaps a dramedy. Some 70 residents of Smithtown, N.Y., have jammed themselves into the boardroom of the town hall. They are accompanied by several grey-suited lawyer types, who conspire in hushed tones. There is also a guy in a chicken costume.

Unfortunately for Verizon Communications, this is a reality show, and one it seems doomed to watch over and over again: Verizon has spent many years and billions of dollars gearing up to enter the cable television business. But before it can do that in Smithtown, it will need approval from the town’s 115,000 residents. And it will have to go through the same process every time it wants to set up shop in another municipality.

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