TELECOM Digest OnLine - Sorted: SBC Wins Big in (Texas) State House

SBC Wins Big in (Texas) State House

Sanford Nowlin (
Mon, 18 Jul 2005 14:13:49 -0500

By Sanford Nowlin Express-News Business Writer

The Texas House of Representatives voted 135-6 Sunday to pass a
controversial bill that would make it easier for the state's biggest
phone companies to offer pay television service.

Supporters of the measure -- which the Senate approved with minor
differences Wednesday -- said it would create jobs and investment by
letting SBC Communications Inc. and Verizon Communications Inc. each
negotiate a single franchise with the state to offer video.

Under current rules, the companies must negotiate agreements with each
city they plan to serve -- just as their cable competitors did. But
San Antonio-based SBC and New York-based Verizon have argued that
reaching individual agreements would slow their rollouts.

"(With passage of the bill), we're going to see competition increase
year after year," said Rep. Phil King, R-Weatherford, who championed
the measure. "It will be kind of like what happened with local service
and long distance."

But cable carriers hotly opposed the measure, as did some cities. They
said it would give the phone giants an unfair advantage, let them
bypass low-income neighborhoods, and strip money from city coffers.

"This bill is such a giveaway, we should be calling it SBC 21,"
Houston Democrat Rep. Harold Dutton said, playing on the name of the
bill, SB 21.

The measure also allows SBC and other dominant phone companies to
increase prices for add-on phone service in large markets like San
Antonio and in smaller ones where they can show they face competition.

Under the bill, basic phone rates would remain frozen until the 2007
legislative session.

SBC and Verizon lobbied vigorously for the new franchise rules. Each
is spending billions to break into the video business as cable
carriers chip away at their phone markets.

If the bill passes, Texas will be the first state to simplify its
video franchising rules to make it easier for SBC and Verizon to roll
out video. The Federal Communications Commission also is expected to
weigh in on the matter.

Lawmakers debated a similar measure during the regular legislative
session, but it died when the House and Senate couldn't iron out major

Observers said the new bill also could die if lawmakers can't complete
work on new school finance rules. School funding is the main focus of the
30-day special legislative session that ends Wednesday.

Lt. Gov. David Dewhurst on Friday said the Senate won't act on any
other bills until it can consider school finance changes. The Senate
would need to approve alterations made to the bill in the House before
it can be signed into law.

Portions Copyright 2005 KENS 5 and the San Antonio Express-News.

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