It may not matter much in the long run but a federal judge in Connecticut ruled this week that AT&T’s (NYSE: T) U-Verse IPTV service meets the definition of a cable service under federal law and should be required to have local franchise agreements. U.S. District Judge Janet Bond Arterton said Connecticut regulators were wrong to determine that U-verse was a two-way product fundamentally different from cable, agreeing plaintiffs including Cablevision, the Connecticut Office of Consumer Counsel and the New England Cable and Telecommunications Association.

So far, AT&T has been able to use a mix of state laws and rulings to avoid being put in the same position as cable operators, who must have local franchise agreements. When that doesn’t work, it might sue or drop the rollout in that area. AT&T hasn’t announced its next step.

Ars Technica (on a page with a large AT&T ad): “The court’s ruling could be moot, however, due to legislation recently passed in the Connecticut state legislature and signed into law earlier this month by Gov. Jodi Rell. The new law sets up state franchising for both cable and phone companies, and state authorities would only have 45 days to act on applications before they are automatically granted.”

• AT&T U-Verse Rollout Maintains Slow Pace, Limited Access