A federal appeals court gave
, the nation's largest cable systems operator, a significant legal victory Thursday, ruling that the company cannot be forced by local communities to lease high-speed cable connections to rival Internet service providers.
Ninth U.S. Circuit Court of Appeals
overturned a judge's 1999 decision that upheld efforts by Portland, Ore., to force AT&T to open its cable lines to rivals of
, which is partly owned by AT&T. The court ruled that the city had overstepped its authority, since AT&T, as a telecommunications company, is governable only by federal law.
Wall Street was pleased with the ruling. AT&T's shares rose 1, or 3%, to close at 36, and Excite@Home jumped 1 15/16, or 10%, to 20 7/8.
The ruling is a setback for other Internet service providers in the fight over "open access." Such companies as
have been lobbying local governments to give them access to cable lines, arguing that Excite@Home has an unfair advantage over them in reaching customers via the faster cable hook-ups.
Several cities, including St. Louis and some Boston-area municipalities, followed Portland in adding similar cable-access laws to the books. Other cities, Los Angeles and San Francisco among them, are considering adding open-access policies themselves.
Portland city officials said they have not decided whether to appeal to the
U.S. Supreme Court
Excite@Home has an exclusive distribution contract with AT&T through 2002, as well as with some other cable systems that provide high-speed Internet access.