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Texas Approves Statewide Video Franchises

The Texas legislature this week approved a telecom bill that would allow telcos that want to offer video services to apply for statewide franchises.

The cable industry--which vehemently opposed the bill because it claims the new rules would give telecommunications giants such as Verizon and SBC unfair competition--has already threatened lawsuits. But rather than focus on the issue at hand, the Texas Cable Association chose to criticize the legislature on its failure to act on issues unrelated to telecom reform.

"For months, Texas legislators have been seeking a way to address the crisis in public schools and the rapid increase in property tax rates," said Tom Kinney, president of Time Warner Cable-Austin Division and chairman of the board of the Texas Cable & Telecommunications Association. "And yet, while members' attention was focused on other areas, a telecommunications bill that had failed in the regular session was reintroduced."

The Texas bill would enable phone companies to get a pay-TV franchise from the state rather than cities, but this change would not go into effect until current contracts expire. The cable industry is still bound by rules that require operators to bid for local franchises. Several bills in other states, including Virginia and California, have addressed the statewide franchise issue and legislation introduced by Sen. John Ensign (R-Nev.) proposes removing the franchise rules for both cable and telcos.

The legislation is now on the desk of Gov. Rick Perry, which if he signs the legislation, will make Texas the first state to override local control of video franchises.