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RBOCs Zero in on Eliminating Texas Franchise Rights
[August 11, 2005]

RBOCs Zero in on Eliminating Texas Franchise Rights


By TED GLANZER
TMCnet Communications and Broadband Columnist

There is no denying it; the RBOCs have been on fire recently.

First, Sen. Ensign (R-Nev.) introduces BICCA, which would essentially remove intramodal competition for the giant telcos.

Then the FCC "deregulates" DSL to put telcos "on a level playing field" with cable companies. Included in the order was the elimination of the requirement that telcos had to lease their lines to competitors.

Now, the latest out of Texas is that the state legislature (the Senate on Tuesday, the House on Wednesday) approved legislation that enables the telcos to roll out their IPTV offerings without having to obtain local franchise agreements. Negotiating one such agreement can take up to eight months at a relatively high cost.



The only hurdle remaining is approval from Texas Governor Rick Perry.

Needless to say, SBC and Verizon are pleased with the latest news. Consider the following excerpts from the two RBOCs' press releases:


SBC Texas President Jan Newton - "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 Southwest Region President Steve Banta - "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."

Not everyone, however, was so pleased with the legislation.

"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 (TCTA). "And yet, while members' attention was focused on other areas, a telecommunications bill that had failed in the regular session was reintroduced."

Kinney went on:

"The passage of this special interest legislation seems to clearly violate the spirit of the vow of the Governor.
"While neither school reform nor property tax reform seems close to passage, the SBC-backed legislation has been sent to the Governor's desk. Even if the legislature is able to pass some limited reforms on these important issues, SB 5 is bad for consumers, bad for competition and bad for Texas -- and should not become law.

"While we are disappointed in the actions of the legislature in sending this bill to the Governor, we trust that the Governor will hold to his promise, and therefore are calling on him to veto this ill-considered legislation."

While this is certainly another victory for the RBOCs, some analysts have cautioned that there are still plenty of challenges that lay ahead for the telcos.

"Chief among there are underdeveloped infrastructure for provisioning video as build-outs proceed as well as lining up robust video content," stated an analyst at Deutsche Bank.

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Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit:

http://www.tmcnet.com/tmcnet/columnists/columnist.aspx?id=100033&nm=Ted%20Gl
anzer

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