The cities of Cambridge, Somerville and Quincy and the Town of North Andover (collectively, the "Issuing Authorities") submit this Memorandum in support of the Issuing Authorities' joint motion to consolidate the above captioned appeals in a single proceeding. The Issuing Authorities have moved that the Massachusetts Department of Telecommunication and Energy, Cable Television Division (the "Division") consolidate any and all hearings with respect to the review of the Issuing Authorities' decisions to deny or to conditionally approve the transfer of cable licenses from MediaOne Group, Inc. ("MediaOne") to AT&T Corp. ("AT&T") pursuant to M.G.L. c. 166A §7 and applicable regulations.

Each of the decisions has as a common requirement that AT&T provide open or nondiscriminatory access to cable broadband for Internet services. The Division should review evidence of the disputed issues of fact and law regarding the open access requirement, which preserves consumer choice and preserves competition among Internet service providers, in a consolidated hearing that will facilitate a complete and efficient presentation of this critical public policy question. The briefs and memoranda that the Appellants have submitted to the Division in the above captioned cases are virtually identical in every material respect. There is no reasonable basis on which the Appellants can credibly oppose consolidation of the subject appeals. Accordingly, for the reasons set forth below, the Division should consolidate any hearings on the Issuing Authorities' decisions in a single proceeding.

This matter involves the independent determination of the Issuing Authorities to deny or to conditionally grant AT&T's FCC Form 394 requests to transfer the cable television license of each Issuing Authority in connection with AT&T's acquisition of MediaOne and MediaOne's various subsidiary companies.

The Division conducted regional hearings throughout the Commonwealth in August and September of this year to address issues relating to the transfer of cable licenses to AT&T and appointed a Special Magistrate to conduct those hearings. The Special Magistrate noted in his written report that "AT&T made it clear again and again

. . . that [its] strategic direction was to create a broadband network, one that went far beyond the video cable services typically contemplated by the MediaOne licenses." (See Summary of Proceedings and Magistrate's Report (the "Magistrate's Report") at page 3). The Issuing Authorities participated in the regional hearings that the Division held and Cambridge conducted its own hearings to determine, inter alia, whether AT&T should be permitted to assume the existing cable franchises of MediaOne in each community. Each of the Issuing Authorities determined that open access to Internet services was a necessary condition of the transfer.

Given AT&T's refusal to allow open access and consumer choice, Cambridge and Somerville denied the requested transfers while North Andover and Quincy granted approval for the transfers only upon AT&T's satisfaction of the conditions established in their written decisions. As will be demonstrated at the Division hearing, the Issuing Authorities' actions are consistent with the requirements of M.G.L. c. 166A and are in accordance with sound public policy. Accordingly, the Division should affirm the Issuing Authorities' decisions in a single consolidated proceeding.

A. The MediaOne - AT&T Merger and Application for Change in Control

On or about July 13, 1999, AT&T simultaneously filed an application for approval of a change in control (FCC Form 394, with exhibits) with the 175 cities and towns in Massachusetts that have granted cable television licenses to MediaOne. Applicable regulations of the Division would have required all 175 towns, as the issuing authorities for the cable licenses, to conduct hearings with respect to the transfer of the subject cable licenses within sixty days of AT&T's July 13, 1999 filing. In response to these unique circumstances, the Division agreed, at AT&T/MediaOne's request, to conduct regional hearings throughout the Commonwealth for the benefit of the subject cities and towns and to expedite and consolidate the required hearings to the fullest extent possible.

B. Regional Hearings Before Magistrate Beard

The Division informed all 175 communities that the Division had granted the request of AT&T/MediaOne for regional hearings and that 11 such hearings would be scheduled. The Division also informed the communities that each issuing authority, including those who participated in the regional hearings, must ultimately consider the application and make a decision on whether to approve the transfer on its own.

The Division appointed Charles J. Beard as the Special Magistrate for the 11 regional hearings. Following the completion of the regional hearings, Magistrate Beard issued a 20 page Summary of Proceedings and Magistrate's Report dated September 24, 1999 (the "Magistrate's Report") containing the non binding findings and recommendations that the Division had previously specified.

Magistrate Beard considered the scope of his charge to be focused on a narrow interpretation of the four criteria set forth in 207 CMR 4.04 --- the consideration of the transferee's (a) management experience; (b) technical expertise; (c) financial capability; and (d) legal ability to operate a cable system under the existing license.

However, Magistrate Beard acknowledged the importance of what he characterized as "public policy" issues in the context of the transfer of MediaOne's cable television monopoly to AT&T. The Magistrate's Decision states, in pertinent part:

Foremost among these "public policy" issues was the open access debate. Magistrate Beard noted that ". . . the [open access] issue has enormous importance as a public policy issue . . . " (Id.) In fact, detailed testimony on the open access issue was presented at several of the regional hearings and was summarized in the Magistrate's Report.

In the end, while Magistrate Beard perceived of his role and authority to make recommendations following the regional hearings as limited in scope, the magistrate made note of the fact that the acquisition of cable monopolies in Massachusetts by AT&T is an extraordinary event with vast public policy and other considerations and that the "open access" issue is central among them.

C. The Issuing Authorities' Hearings and Decisions

1. The City of Cambridge

On or about November 10, 1999 the City of Cambridge sent AT&T a written decision denying AT&T's FCC Form 394 request to transfer the Cambridge cable television license from MediaOne to AT&T. Cambridge provided a copy of its written decision to the Division as well. A copy of Cambridge's November 10, 1999 decision (the "Cambridge Decision") is attached as an exhibit to the Issuing Authorites Opposition to AT&T Motion for Summary Decision.

Cambridge conducted its own hearing on AT&T's Form 394 request pursuant to M.G.L. c. 166A §7 on August 19, 1999. In addition to the hearings, Cambridge submitted questions regarding various compliance issues to MediaOne in correspondence following the August 19 hearing.

Cambridge denied the transfer request. Among the reasons that Cambridge articulated for its denial of the transfer request were the following:

• MediaOne had failed to comply with Cambridge's Final License in a number of respects;
• Cambridge determined that AT&T did not have the cable television management experience to assume control of the Cambridge cable television system.
• Cambridge considered the provision of nondiscriminatory access to the cable modem platform for Internet service providers not affiliated with AT&T/MediaOne to be of great importance to the residents of Cambridge and a matter of public interest. AT&T's refusal to commit to an "open access" policy for broadband Internet services was contrary to that public interest.

2. The City of Quincy

On or about November 10, 1999 the City of Quincy issued a written decision to the Division with respect to AT&T's FCC Form 394 request (the "Quincy Decision"). A copy of the Quincy Decision is attached as an exhibit to the Issuing Authorities' Opposition to AT&T's Motion for Summary Decision.

The Quincy Decision specifies that Quincy approves of the transfer of its cable license from MediaOne to AT&T based upon the recommendations set forth in the Magistrate's Decision and based further upon the specific representations and warranties that AT&T and MediaOne made at the regional public hearings referenced above. In addition, consistent with its reliance upon the Magistrate's Decision, Quincy made its approval of AT&T's FCC Form 394 request expressly contingent upon AT&T, as holder of the Quincy cable license, providing nondiscriminatory access to its cable system by any requesting Internet service provider on terms and conditions that are at least as favorable as the terms and conditions provided to itself or any affiliate.

3. The Town of North Andover

On or about November 10, 1999, the Town of North Andover sent AT&T a copy of its written decision with respect to AT&T's FCC Form 394 request (the "North Andover Decision"). North Andover also provided a copy of the decision to the Division. A copy of the North Andover Decision is attached as an exhibit to the Issuing Authorities' Opposition to AT&T's Motion for Summary Decision.

Representatives of North Andover participated in the regional hearing that the Division conducted on August 12, 1999 in Lowell. Based upon the representations and warranties that AT&T and MediaOne made at that hearing, the transcript of the proceedings, and its own independent review of the facts, North Andover approved the transfer request of AT&T. North Andover's approval was expressly contingent on five conditions: (1) that there be no increase in subscriber rates as a result of the transfer of control; (2) that AT&T comply in all respects with all of the terms and conditions of the North Andover Renewal License; (3) that AT&T resolve certain compliance matters with the Renewal License identified in an attachment to the North Andover Decision; (4) that AT&T provide nondiscriminatory access to its cable modem platform in North Andover for unaffiliated providers of internet and "on-line" services; and (5) that AT&T pay all applicable taxes due to the town.

4. The Somerville Decision

On or about November 10, 1999 the City of Somerville issued a written decision to AT&T with respect to AT&T's FCC Form 394 request (the "Somerville Decision"). A copy of the Somerville Decision was provided to the Division. A copy of the Somerville Decision is attached as an exhibit to the Issuing Authorities' Opposition to AT&T's Motion for Summary Decision.

Representatives of Somerville participated in the regional public hearing that the Division held in Malden, Massachsuetts. In addition to considering evidence and material submitted at the Malden regional hearing, MediaOne wrote directly to Somerville with respect to the issue of "open access" to Internet service providers over cable television lines. Thus, MediaOne raised and responded to Somerville's concerns with respect to the

"open access" issue directly.

Somerville denied AT&T's transfer request. Among the reasons set forth in the Somerville Decision are the following:

• In Somerville's review of the available evidence, AT&T, as the tranferee, lacks cable television management experience and technical expertise. Somerville concluded that because AT&T, as tranferee, had no direct experience in operating cable systems for municipalities, the transfer was inappropriate.
• Somerville rejected AT&T's plea that it would obtain or gain an appropriate level of municipal cable television experience by employing or otherwise relying upon MediaOne employees. Somerville informed AT&T that

MediaOne had not demonstrated management or technical expertise with respect to the Somerville cable system that was beneficial to Somerville's cable subscribers. Accordingly, AT&T's purported reliance on MediaOne's experience and technical ability was rejected with sound reason.

• Finally, Somerville noted that AT&T's refusal to permit nondiscriminatory access to its high speed cable modem Internet platform poses a substantial legal barrier to the operation of a free and competitive market for high speed data services. Somerville specifically found that AT&T's position on this important public policy issue rose to the level of a potentially actionable anti-trust violation that Somerville could not and would not condone.

D. The "Open Access" Issue

As set forth above, each of the Issuing Authorities rendered an independent decision with respect to AT&T's transfer request. However, each of the Issuing Authorities determined that "open access" to cable based Internet services (such as the MediaOne broadband network) was a matter of great public interest to their communities. Cambridge and Somerville determined that AT&T's unwillingness to allow consumer choice of Internet service providers was grounds for denial of the transfer request. Similarly, Quincy and North Andover determined that "open access" to cable based Internet services was essential and made approval of the AT&T transfer request expressly conditional on AT&T providing nondiscriminatory access to its cable modem platform for unaffiliated Internet service providers.

These open access requirements are in the public interest. Access to the Internet typically requires the establishment of an account or contract between the consumer and an Internet Service Provider ("ISP"). Internet Service Providers provide their clients with access to server computers and other hardware that permit individual consumers to access whatever information or data they seek on the Internet. Consumers may access the Internet through accounts with an ISP via traditional phone lines, high-speed telephony lines, and, most recently, cable television lines equipped with high speed cable modems. MediaOne provides a high speed cable modem platform for its own Internet service, known as Road Runner, through the cable television monopoly that it enjoys in most of the 175 communities in Massachusetts it serves.

MediaOne's "Road Runner" Internet Service Provider is an independent company separate and apart from MediaOne itself. Put simply, MediaOne and its various local cable subsidiaries provide cable television services in the communities MediaOne serves while MediaOne's affiliated Road Runner company operates as an independent Internet Service Provider using the same lines that transmit cable television signals. MediaOne simply bundles its RoadRunner service seamlessly from the point of view of the consumer who subscribes to MediaOne's "broadband" cable modem service.

Internet content may be communicated to a consumer over a high-speed cable modem platform at speeds that are many times faster than a traditional phone line. Accordingly, consumers will prefer access to the Internet via a cable modem platform compared to access over slower phone lines. At the various public regional hearings described above, AT&T consistently and steadfastly maintained that it would not permit any Internet Service Provider that is not affiliated with AT&T or MediaOne to provide high speed Internet access via MediaOne's current high speed cable modem platform on the same terms and conditions that Road Runner now enjoys. As noted in Magistrate Beard's summary of the position of advocates of open access, "… Road Runner is an independent company, and the fact that it is affiliated with MediaOne should not be a reason for it to enjoy a competitive advantage."

In the end, consumers benefit from open access to the Internet via high speed cable modem platforms because consumers would have a host of choices from among various Internet Service Providers without having to pay both the Road Runner fee and the fee of their Internet Service Provider of choice. Moreover, the creation of a level playing field on which competing ISPs may offer Internet services via the high speed cable modem platform that accompanies the cable television monopoly would increase competition between ISPs and would likely lead to lower prices and improved services for consumers. The Issuing Authorities' consideration of these factors, among others, in their respective decisions was entirely appropriate and should be upheld in a consolidated hearing.

E. AT&T's Appeals

AT&T filed the appeals in the North Andover and Quincy matters on November 23, 1999. AT&T filed its appeal of the Cambridge matter on November 29, 1999. AT&T filed its appeal in the Somerville matter on December 3, 1999. The briefs that AT&T submitted in support of the North Andover and Quincy appeals are virtually identical in every respect --- only the names of the municipalities are changed. The briefs and other material that AT&T submitted in the Cambridge and Somerville appeals are substantially similar to the North Andover and Quincy submissions. Accordingly, by framing the issues of fact and law that the Division must review in an identical way in each appeal, AT&T essentially concedes that the issues are common in each case. On the record in these appeals, which itself involves common testimony, exhibits and evidence introduced in the regional hearings upon which each Issuing Authority relied, the Appellants cannot reasonably oppose the Issuing Authorities' request for consolidation.

A. The Common Nucleus of Facts and Common Issues of Law

801 CMR 1.01(7)(j) provides that an agency such as the Division may consolidate proceedings in appropriate circumstances. The regulation provides that:

Similarly, the informal hearing rules provide for consolidation of proceedings. 801 CMR 1.02(9) provides:

Finally, procedural rules applicable to the Department of Telecommunications and Energy provide for consolidation of hearings when involving common issues of fact and law. 220 CMR 1.09 provides:

In the matter of Petition of Dispatch Communications of New England, Inc. d/b/a Nextel Communications, Inc., D.P.U. 95-59-A (July 19, 1996) the Department of Public Utilities articulated the standard under 220 CMR 1.09 in consolidating matters for hearing. There, the DPU noted:

In this case, the determination of the propriety of the Issuing Authorities' individual decisions to deny or grant conditional approval of AT&T's FCC Form 394 requests for cable license transfers all involve a common nucleus of facts and should be reviewed under identical legal standards. In each instance, the subject license transfer request originates from AT&T's corporate take-over of MediaOne. The only change in the landscape in each case is the identity of the municipality from which AT&T seeks approval.

Although each Issuing Authority at issue issued an independent decision on the merits of AT&T's transfer request, all of the Issuing Authorities relied upon the representations and warranties that AT&T and MediaOne made in the regional hearings that the Division conducted and further relied, in part, upon the non binding Magistrate's Decision. Finally, in each case, the municipality specifically found that AT&T's refusal to permit open access to the existing MediaOne high-speed cable modem Internet platform was in violation of sound public policy and against the best interests of the subject communities and consumers. Although each Issuing Authority articulated additional reasons for their respective decisions, the Issuing Authorities' evaluation of the important public policies associated with open access to the high speed cable modem Internet platform that accompanies the granting of the cable television license/monopoly are at the core of each case.

Magistrate Beard acknowledged that the "open access" issue --- while not within the narrow confines of his charge --- was a critical component of public policy considerations with respect to the acquisition of a Massachusetts cable monopoly by AT&T. This issue is at the core of each of the Issuing Authorities' decisions. Because any hearing on the Issuing Authorities' determinations with respect to AT&T's transfer requests will necessarily involve common issues of law and fact, the Division should consolidate any hearings in a single proceeding.

Moreover, AT&T identification of identical issues in each of the appeals and its articulation of identical arguments in opposition to the Issuing Authorities Decisions and the "open access" requirement binds AT&T here. The Appellants cannot contend, having submitted to the Division identical issues in virtually identical briefs, that consolidation of these matters is not appropriate.

B. Consolidation Will Preserve Administrative Resources

The consolidation of any hearings with respect to the Issuing Authorities' individual decisions will preserve the Division's administrative resources as well. The Division has already acknowledged that the unique circumstances of AT&T's acquisition of MediaOne and MediaOne's associated cable licenses in 175 Massachusetts communities warrants consolidated hearings in the form of the 11 regional public hearings and appointment of Magistrate Beard to expedite the hearing process mandated under M.G.L. c. 166A.

AT&T, MediaOne, the Division, the Issuing Authorities and the communities of each of the subject municipalities will best be served by consolidation of any hearings in a single proceeding. Rather than hear evidence of the propriety of each of the Issuing Authorities' decision in seriatim, the Division should review the subject determinations as a whole. Consolidating the hearings into a single proceeding will save time, resources of all of the concerned parties and will lead to a uniform and consistent decision. Because each of the subject determinations involves common issues of law and fact, no party will be prejudiced by the consolidation of the hearings. In fact, the consolidation of the hearings will lead to a more focused and logical examination of the common issues in each case for all of the concerned parties.

In addition, each of the Issuing Authorities issued its independent decision on or about November 10, 1999. Accordingly, the timeline for pursuing any review of those decisions by the Division will be identical. This further amplifies the administrative convenience of consolidating the hearings. To the extent that the Appellants' staggering of their filings on different dates puts these appeals on slightly different tracks, the Appellants' apparent strategy to attempt to divide and conquer should not control the proceedings.

If the Division determines that it may not consolidate these matters in a single hearing or simply convene common hearings in which to hear evidence and argument in each appeal, the Issuing Authorities will be substantially prejudiced. Each of the Issuing Authorities has an obvious and substantial interest in the Divisions' determination of the propriety of consideration of the "open access" issue in the transfer proceedings at the core of these appeals. This issue will be examined in each of the appeals. Accordingly, each of the Issuing Authorities is entitled to present evidence with respect to the "open access" issue in any of the noticed appeals as an interested party that may be ". . . substantially and specifically affected by the proceeding . . . " pursuant to 801 CMR . If the appeals are not consolidated in a single proceeding or scheduled for a single hearing on the merits of each matter each of the Issuing Authorities will be in the awkward position of having to intervene in each of the other municipality's proceedings in order to preserve their respective rights. This procedural morass can be best avoided by consolidating the cases.

C. The Public Interest Is Best Served By Consolidating The Hearings

As Magistrate Beard noted, "[t]he transfer obviously raises a host of public policy questions." (See Magistrate's Decision at page. 20). The public interest in this case will be best served by the consolidation of the hearing of any challenge to the Issuing Authorities' decisions in a single proceeding. Consolidation of the hearings will promote a logical and uniform determination of the issues of law and fact common to each case and will avoid potentially inconsistent results. Achieving a uniform determination of the common issues of fact and law involved in the Issuing Authorities' decisions with respect to the AT&T transfer requests will place the least administrative burden upon the Division and is in the public's best interest. Accordingly, any hearings on this matter should be consolidated in a single proceeding.

D. The Appellants' Position On Consolidation

The Appellants have agreed in earlier discussions with counsel for the Issuing Authorities that consolidation of the North Andover and Quincy appeals is appropriate, but the Appellants have, to date, declined to consent to consolidation of the Cambridge or Somerville cases. The Appellants' withholding of consent to consolidation of the Cambridge and Somerville appeals is unreasonable under the circumstances.

For the reasons set forth above, and for the reasons set forth in the individual decisions of each of the Issuing Authorities attached hereto, the Division should consolidate any and all hearings with respect to the Issuing Authorities' denial or conditional approval of the transfer of cable licenses to AT&T in connection with the AT&T and MediaOne merger in a single proceeding.

Respectfully submitted,

City of Cambridge, City of Quincy

City of Somerville and Town of North Andover,

by their counsel,

Charles Nesson

1575 Massachusetts Avenue

Cambridge, MA 02138

(617) 495-4609

nesson@Law.harvard.edu

Dated: December ___, 1999