Wednesday, August 10, 2005

Texas Legislature Passes Telecom and Video Franchise Deregulation Bill

The Texas House voted 144-to-1 to pass a bill that updates regulation of telecommunications in the state and allows for a single statewide franchise provision for companies entering the cable television business. The bill, Senate Bill 5, was passed by the Texas Senate earlier this week and now awaits final approval by Texas Gov. Rick Perry.

The state-issued video franchise will not require mandatory build outs and will keep existing municipal cable franchise agreements in place until they expire.

In addition to providing for a single state franchise for cable TV services, the legislation covers a number of other areas, including broadband over powerline (BPL) services, telecom wholesale services, the deregulation of certain ILEC markets, and oversight of consumer cable TV service complaints.

SBC: In a statement, SBC Texas President Jan Newton said "This action is a testament to the legislature's commitment to Texas consumers. This is a new era of communications - one marked by new technologies, unprecedented choice and unparalleled convenience. Lawmakers recognize the potential in this marketplace and have moved to seize on its opportunities and promise. Nowhere is this promise greater than in Texas, which today demonstrated again that the voice of the consumer rises above all others. By passing this bill, lawmakers have encouraged new competitors - using new technologies - to build broadband infrastructure and provide a next-generation video alternative to cable."

Verizon: Verizon Southwest Region President Steve Banta said "All Texans should be proud that our state is the first in the nation to open up the video market so that consumers can have a choice of video providers. Consumer choice and competition among video providers will result in new and innovative services and better pricing. We are excited about the opportunities we now have to offer FiOS TV services to customers we serve in Texas."

Texas Cable & Telecommunications Association: Speaking in opposition, Tom Kinney, president of Time Warner Cable-Austin Division and chairman of the board of the Texas Cable & Telecommunications Association (TCTA), said "SB 5 is bad for consumers, bad for competition and bad for Texas -- and should not become law... Should this special interest legislation actually become law in Texas, we would expect there to be a number of legal challenges. The next step in this process will almost certainly be the courts, where the substantial legal issues contained in this legislation hopefully will be resolved in a more thoughtful way, without the undue influence of hordes of SBC lobbyists trying to sway the outcome in their favor."

  • In July 2005, U.S. Senator John Ensign (R-NV) proposed a bill that would eliminate the requirement that video service providers obtain a local or state cable franchise agreement in order to provide video service. The federal legislation seeks to promote inter-modal competition between telcos and cable operators by making it easier for telcos to launch video services.

See also