From InsideBayArea.comAT&T brings competition into county
Cities to consider company's offer to bring in new technology
By Christine Morente, STAFF WRITER
Programming your DVR from your cell phone or watching four channels at once on your television set could be in your future.
AT&T wants to muscle its way into San Mateo County and compete with Comcast and RCN to provide Internet-based television and faster Internet services.
It's competition that city officials from Belmont, Brisbane, Burlingame, Foster City, Millbrae, Redwood City, San Carlos, San Mateo and San Mateo County welcome, because it lowers rates. But AT&T is unwilling to pay franchise fees to roll out Project Lightspeed.
For the past two months, the cities have formed a coalition and have negotiated with AT&T. The phone company needs the cities to approve encroachment permits to allow physical upgrades to its new system.
"We're ensuring that our interests are met and (the project) won't create problems for us," said Susan Loftus, deputy San Mateo city manager.
For at least 30 years, Comcast has paid cities 5 percent of its gross revenues a value of $250 million to the county, said Anthony Thomas, telecommunications lobbyist for the League of California Cities.
A franchise agreement gives a company access to a community and also prevents discrimination. Without a franchise agreement, a company could bypass poorer areas of a city or focus on areas they think would be more profitable.
"This is a promising area for AT&T," said Dwight Stenbakken, deputy executive director for the League of California Cities. "Technology is running ahead of everything, so you have to increase competition for providing theseservices."
Anthony Thomas, telecommunications lobbyist for the League of California Cities, worries that cable providers will question the validity of their local franchise agreements with cities if AT&T is spared from paying the fees.
Meanwhile, there is a spot bill in the Senate that could do away with the city-by-city franchise negotiation process.
AT&T is willing to pay a percentage of its profit to the city, but doesn't want to be locked into a franchise fee, which would force AT&T to offer services universally. It also doesn't like that every city has a different fee structure.
"We want competition," Thomas said. "We're more than willing to take a new look at a state issued franchise that assures us that cities are not losing revenue."
Furthermore, despite what city and county officials believe, AT&T spokesman Gordon Diamond said the company is still in the telecom business. Only cable and
garbage companies pay franchise fees.
"We are not putting in a cable system," he said.
Under Project Lightspeed, existing fiber-optic wires would be pushed closer to homes for a larger bandwidth between 20 to 25 megabits per second to provide Internet Protocol Television service.
That means higher-speed Internet access, the ability to make phone calls through the Internet, and Internet-based television.
Some special features include enhanced digital recording, multiple camera angles of sporting events via picture-in-picture views, and an enhanced program guide. The system will later be marketed as AT&T's U-verse.
Comcast offers video services, On Demand, DVR, HDTV, High-Speed Internet, and Digital Voice. RCN provides fiber optic local and long-distance phone, cable television, and Internet services.
"Project Lightspeed is really the next evolution of our network," Diamond said. "IPTV is a much different way consumers receive TV service today. Everything within the telecom industry is converging to IP."
On Wednesday, San Ramon signed with the phone company's IPTV service. Under its agreement with the city, AT&T will pay up to 5 percent of gross revenues from subscribers, provide educational and public access programming options required by cable providers.
Anaheim has also agreed to go with Project Lightspeed and AT&T is testing the service in Texas, Diamond said.
"We understand when we talk to cities, they receive revenue streams from cable companies," Diamond said. "We make it very clear that we understand how critical revenue streams are, and we'll work to make sure revenue streams are intact."
Diamond wants to come to an agreement by the end of the month, take it to the city councils for approval in April and begin network upgrades in the county.
Staff writer Christine Morente covers Burlingame, Millbrae, San Bruno and Hillsborough. She can be reached at (650) 348-4333 or at firstname.lastname@example.org
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