AT&T has told communities that their U-Verse VDSL IPTV service technically isn't cable, so it isn't governed by franchise agreements. Towns and cities that challenge this assertion have traditionally been greeted with an AT&T lawsuit. Back in July, a federal court in Connecticut stated that franchise rules do, in fact, apply to U-Verse. Connecticut state regulators have now ordered AT&T to discontinue signing up new IPTV customers until they obtain a license for the service.

AT&T says they plan on filing a lawsuit today to try to reverse the ruling. In a statement e-mailed to us from AT&T, the company accuses the state of "protecting the state's cable TV monopoly" and violating the letter of the law:Both AT&T and Verizon have spent the last few years waging political war on traditional franchise agreements, and have convinced more than a dozen states -- including Connecticut -- to pass state-level franchise laws under the promise that the result would be lower TV costs (that hasn't happened).

That hasn't happened because the primary goal of these usually phone-company-written laws is not to reduce prices (yes, I know that's very shocking). The goal to eliminate build-out requirements so the companies can selectively deploy next-generation technology to only the most profitable (read: not rural) areas.

Unfortunately for consumers, a number of the laws are little more than legislative gift baskets that strip away consumer protections, kill off public access TV funding and in some cases, erode local eminent domain rights.