The Connecticut Department of Public Utility (DPUC) decided that AT&T must file for a cable franchise license, reversing its own ruling in July that AT&T’s U-verse television is not a cable service.

AT&T has been arguing all along – and the DPUC originally agreed – that because U-verse is delivered via DSL, it is an Internet service, and not a cable service, and therefore it should be categorized under Connecticut law as a competitive video operator, a category exempt from having to file for a cable franchise.

Some consumer groups argued otherwise, and the state’s attorney general agreed, forcing the DPUC to review its original decision.

AT&T has been gradually rolling out U-verse in Connecticut for almost a year. It has about 7,000 subscribers spread among 40 communities in the state.

The Connecticut regulators said the company can continue to support existing customers. AT&T said the ruling means it must disconnect those customers.

The company must file for a franchise by the end of the year. Until then, it is barred not only from signing up new customers, but also from building any new plant to support U-verse. 

AT&T said it will sue the state to reverse this latest decision.