AT&T files FCC access complaint against Cablevision

WASHINGTON (Reuters) - AT&T Corp. (T.N) said on Monday it filed a U.S. regulatory complaint that Cablevision Systems Corp. (CVC.N) was improperly withholding regional sports programming that AT&T must have to roll out video service in Connecticut.

AT&T said it had filed a complaint with the Federal Communications Commission against Cablevision and its Rainbow Media Holdings subsidiary, owners of the Fox Sports Network New York, Madison Square Garden Network and Fox Sports Network New England.

"Access to this popular programming is essential to AT&T's ability to present a fully competitive video service in Connecticut," AT&T said in its complaint.

The three sports networks carry games of the New York Knicks and Boston Celtics basketball teams, as well as the New York Rangers, New York Islanders and New Jersey Devils hockey teams, AT&T said.

Cablevision is a major cable operator in Connecticut and the leading cable company in the broader New York metropolitan area, AT&T said.

"Cablevision has an obvious incentive to deny its competitor, AT&T, access to this critical programming in Connecticut," AT&T said in its complaint. "Cablevision is acting on that incentive by unlawfully refusing to license the three (sports networks) to AT&T."

A spokesman for Rainbow said the company had programming agreements with a number of companies, including AT&T itself, but had not come to an agreement with AT&T in Connecticut.

"We have reached programming agreements with a broad range of distributors including DIRECTV, Echostar, Verizon, RCN and even AT&T itself, but have outstanding questions regarding AT&T's violation of prior distribution agreements and about certain aspects of AT&T's technology and the protection of our programming," Rainbow said through the spokesman.

At the center of the dispute is a new, Internet protocol television (IPTV) service called U-Verse that AT&T is rolling out in Connecticut and elsewhere in an effort to compete against cable providers' all-in-one packages of video, Internet and phone services.

AT&T said late last month that it was installing the U-Verse service to about 500 homes per day, and that it had more than 30,000 users. In April, it had reported an installation rate of 2,000 per week.

The company said in May that it plans to spend $6 billion to $6.5 billion through end-2008 to build the U-Verse network, and make the service available to 18 million homes in its traditional 13-state territory by end-2008.

Verizon Communications (VZ.N) has also launched an advanced video service, called FiOS.

AT&T said Cablevision and Rainbow, had cited "pretextual reasons" for refusing to license the sports programming, including the fact that AT&T does not hold a cable franchise in Connecticut.

AT&T said that reason was bogus because Connecticut regulators had determined that its video service was not subject to the state's cable franchising requirement.