AT&T told state regulators last year that its Internet-based service should not be subject to cable rules because it is a data service. The state Office of Consumer Counsel filed a federal lawsuit after Connecticut's Department of Public Utility Control decided that AT&T's new service should be treated as a data service. A federal judge recently tried to negate the ruling.

But according to AT&T, the ruling was made moot by the state's new telecommunications law. The company has filed a new application for a license for its U-Verse service.

In a statement, Blumenthal accused AT&T of pursuing a more lightly regulated franchise and insisted that the company is only interested in serving the state's wealthiest and most accessible customers. He said the company has abandoned its argument that its Internet-based service is not a cable service so that it can take advantage of a flawed new law.

"Their switch in position is apparently to use this new law in contending that they can be granted a less demanding 'franchise-light,' giving them all the profit but none of the responsibility for serving the public," Blumenthal said.

He also claimed that AT&T has been illegally operating in Connecticut without a franchise for more than a year. The company currently offers its U-verse service in parts of 40 cities and towns and has pledged to invest $336 million in the network.

"We will insist that they meet all federal requirements for a franchise in Connecticut, including a schedule for a full build-out servicing all customers," Blumenthal said. "Competition must benefit all customers and citizens to be meaningful."

AT&T released a statement blasting Blumenthal for "trying to turn back the hands of time" on the state's telecom market. The company claims that the state's new rules have opened it to more competition and that Blumenthal would be denying consumers the benefit of the statute by blocking its application.

AT&T spokesman Seth Bloom said Blumenthal is calling for the company to take steps it is already required to do under the new law. He said the company has committed not to "cherry-pick" by offering service only in wealthy areas and to comply with local requests about carrying public educational and government channels on its system.

"There is absolutely no need for him to call for these things," he said. "He has no evidence to support his claim that we will selectively provide service in only certain areas. We're going to continue to build [to] reach communities of all types in Connecticut."