Handing an important victory to AT&T Corp., a federal appeals court Thursday rejected a move by Portland, Ore., to force the company to open its cable network to competing Internet service providers.
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.
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