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Franchise-Reform Bill Hits Calif. Assembly

A cable-franchising-reform bill, in the works since last May, was introduced in California.

The bill would allow new providers into the market 30 days after applying to the state Department of Corporations.

Incumbent cable operators will oppose the bill unless amended, California Cable & Telecommunications Association president Dennis Mangers said.

The bill was co-authored by Assembly Speaker Fabian Nunez (D-Los Angeles) and Assemblyman Lloyd Levine (D-Van Nuys), chairman of the Assembly Utilities and Commerce Committee. At a Sacramento press conference Thursday morning, both stressed their belief that the bill will prompt broadband investment, create jobs and level the competitive playing field.

AT&T Inc. has vowed to invest $1 billion in infrastructure improvements in the state to enable video and other services. Verizon Communications Inc. is upgrading and is delivering video services in Beaumont, where it obtained a local franchise. Both companies argued that they need state authorization to quickly enter the market.
Mangers blasted the bill as blatant attempt by the phone companies to "redline neighborhoods and just skim the cream off the top."

But Nunez said the bill, and competitive economics, will prevent discrimination. Minorities in his district are among the heaviest users of cable television, he noted, adding that new providers will recognize the potential for serving them.

The bill requires new providers to file a report, 36 months after they begin service, detailing homes passed and subscribers, including demographic data. The government can use this to determine if providers are avoiding social and economic groups, according to the legislators.

The bill would dissolve decades-old policy in the state that mandates that new providers match and universally serve the same areas as incumbent providers.