VERIZON's OPEN ACCESS CRUSADE

Despite losing another battle to open cable lines to competing ISPs, Verizon Communications said it intends to keep fighting for open access mandates on cable operators. Verizon, whose antitrust suit against AT&T, Comcast and Excite@Home in U.S. Dist. Court, Pittsburgh, ended earlier this month when all 4 parties agreed to dismiss case, said it would continue pressuring cable industry through FCC, NTIA, other federal agencies, courts, state legislatures. "This is by no means a closed issue," Verizon spokeswoman said.

Verizon, whose GTE unit had led quest for open access mandates and filed Pittsburgh suit last Oct., is focused particularly on FCC and other federal agencies now that Commission Chmn. Kennard plans to conduct administrative proceeding on cable-delivered Internet access. While FCC officials haven't yet spelled out what type of proceeding they would conduct, open access advocates are pressing them to declare cable-Internet service to be "telecom service" and regulate it accordingly. In Portland, Ore., decision 2 months ago, 9th U.S. Appeals Court, San Francisco, ruled that cable-Internet service did qualify as telecom service, theoretically making cable operators in western states subject to interconnection and other requirements.

In wake of 9th Circuit decision, Verizon also is pushing 4th U.S. Appeals Court, Richmond, Va., to make similar broad ruling. Phone company, whose GTE and Bell Atlantic units both filed in support of local cable regulators earlier in case, submitted reply brief in Henrico County, Va., open access dispute last week, with oral argument scheduled for Sept. 27.

Week earlier, FCC submitted friend-of-court brief urging 4th Circuit to uphold lower court ruling against local open access mandates and to avoid setting national policy on greater open access issue (TVD Aug. 14 p6). NCTA also filed amicus brief, calling on appellate court to uphold earlier U.S. Dist. Court, Richmond, decision that federal and state law blocked Henrico County from imposing open access requirements.

Verizon, AT&T, Comcast, Excite@Home and their attorneys declined to discuss settlement of Pittsburgh suit. In terse 2- page filing with U.S. Dist. Court there Aug. 4, all 4 agreed that GTE's suit would be "dismissed with prejudice," meaning that antitrust charges couldn't be brought again. Each company also agreed to cover its own legal costs, which is typical in such cases.

While Verizon spokeswoman insisted "we're happy with the way it was settled," cable companies clearly were triumphant. Spokesman for AT&T said MSO "conceded nothing in this suit" and agreed only not to pursue Verizon for legal costs. Spokeswoman for Comcast, calling antitrust suit "a transparent effort by GTE to derail high-speed Internet competition from the cable industry," said company was "grateful that it has been dismissed."

David Armstrong, Pittsburgh attorney who represented Comcast, said Verizon effectively lost case early on when court refused its request to speed up usually lengthy discovery process and go to trial quickly. At normal pace, antitrust case wasn't slated to go to trial until sometime next year, delaying resolution of issues and potentially costing each party millions of dollars in legal fees, he said. "They [Verizon] lost interest over time, especially when the bills began to roll in," said Armstrong, of Dickie, McCamey & Chilcote.

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