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to <br />USDC, Oregon CV-99-65-PA. Neither decision is controlling in North Carolina. <br />The Oregon decision is on appeal and the Virginia decision is likely to be <br />appealed. <br />No doubt, there will be some resolution of this matter at the federal level. <br />Considering North Cazolina's strong local government law relating to the <br />regulation of cable operators as "public enterprises," it would be appropriate for a <br />local government to include an "Open Access" provision as a condition for <br />granting approving the AOL-TWC merger. <br />Absent any requirement by local governments to obligate AOL-TW to adhere to <br />the terms of the MOU, the parties (AOL, Time Warner and AT&T) can exercise <br />their discretionary ability to restrict or even cut off customers from content and <br />products offered by unaffiliated Internet based competitors. <br />A. MediaOne - AT&T <br />USWest, a former Regional Be11 Telephone Company (RBOC), made a corporate <br />decision in the 1990s to enter the cable television business. They purchased the <br />assets of multiple system providers (MSOs), such as Colony Cable as well as a <br />25% interest in Time Warner Entertainment. USWest named its cable division <br />MediaOne. Recently, USWest decided to concentrate on its core business, <br />telephone service and decided to divest itself of its cable television assets. <br />Simultaneously, AT&T, a long distance telephone company, received authority <br />from the federal government to provide local telephone service. AT&T reasoned <br />that they could either lease `Bell' lines or deploy their own network. AT&T <br />decided to pursue the third alternative, to purchase cable systems and use those <br />wires to provide local and long distance telephone service to its customers and <br />compete against the Bell telephone companies and GTE. <br />AT&T's acquisition of MediaOne's 25.51 % shaze of Time Warner Entertainment <br />Advance Newhouse will give it a 32% interest in Time Warner's high speed <br />Internet service, Road Runner. When this interest is combined with AT&T's 58% <br />stake in Excite home, MediaOne's high-speed Internet service, places AT&T <br />squarely is in the position of dominating the two prominent broadband-cable <br />modem services. <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Cazolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />