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Texas OKs Statewide Cable Franchises

As expected, Texas Gov. Rick Perry has signed the bill, passed in a special legislative session, which authorizes statewide franchises for competitive cable franchises.

The wide-ranging telecommunications bill also deregulates some of the wire-line services of the incumbent local providers, including SBC Communications Inc. and Verizon Communications Inc., both of which are headquartered in Texas.

And the bill promotes the deployment of broadband over power lines.

"The broadband customer's thirst for fast, reliable and interactive voice, data and video services will be quenched" as Verizon rolls out new services over its fiber-optic network, Verizon Southwest-region president Steve Banta said in response to the governor's action.

Incumbent cable providers must still adhere to their local cable franchises, but they will be deregulated under the bill when their current pacts expire.

Operators vehemently opposed the bill, arguing that the telcos needed no legislative assistance in order to compete.

The legislative change will be most impactful on Time Warner Cable, the state's largest operator, but it will also impact Charter Communications Inc. and Cox Communications Inc., in addition to smaller operators.

SBC maintained that its planned Internet-delivered service needs no franchises. Verizon acknowledged that it needs franchises, and it has obtained five in Texas, but it has pursued legislative changes allowing state franchising in Texas and elsewhere.

Although the new state policy supersedes the local franchise agreements, a Verizon spokesman stressed that the telco will honor the local agreements it has reached to date.