Officials in Portland, as well as San Francisco, Broward County, Fla., and other communities, have argued that high-speed access to the Internet through cable should be subject to local regulation, just as cable TV franchises are.
But the 9th U.S. Circuit Court of Appeals ruled that AT&T, which has spent billions buying cable companies to create a national network for local telephone and high-speed Internet service, does not fit the legal definition of a cable network. Instead, it is a telecommunications service, and therefore governable only by federal law, the court said.
The ruling is a setback for other Internet service providers, such as America Online Inc., which have argued that AT&T should be forced to open its cables to other competitors.
Excite@Home, which is partially owned by AT&T, has exclusive rights until 2002 with AT&T, and agreements with several other cable systems to sell high-speed Internet access.
Excite@tHome stock surged 11 percent on the news, rising $2.063 to $21.219 on the Nasdaq Stock Market. AT&T also rose, jumping $1.438 to $36.375 on the New York Stock Exchange.