TELECOM Digest OnLine - Sorted: California Eases Cable Rules, Welcomes Telephone Companies

California Eases Cable Rules, Welcomes Telephone Companies

Adam Tanner (reuters@telecom-digest.org)
Fri, 01 Sep 2006 13:35:43 -0500

By Adam Tanner

California's legislature passed a bill on Thursday night aimed at
increasing competition among cable television providers and easing the
ability of telephone companies to enter the market.

The state's Assembly by a vote of 64 to 5 backed an amended bill
passed by the California Senate the night before. The Assembly had
approved an earlier version of the legislation in May.

"California has led the way in the evolution of new technology, and
with this bill, our state's policy toward contemporary TV and
entertainment technology is catching up to the times," Assembly
Speaker Fabian Nunez, who has championed the legislation, said in
statement.

The measure, passed ahead of a midnight deadline for new bills, still
needs the signature of California Gov. Arnold Schwarzenegger to become
law.

The bill eliminatea city-by-city franchises, which Nunez said made it
nearly impossible for rivals with new technologies to enter
California's market for TV entertainment services.

According to an analyses by the state Senate's Rules Committee, 63
percent of California TV-watching households have cable reception, 27
percent subscribe to satellite service and the rest use conventional
antennae.

TELEPHONE COMPANIES TO GAIN

Telephone companies including AT&T Inc. have lobbied to eliminate laws
requiring franchise deals with municipalities before they may offer
television service. Verizon already offers television service in six
California cities.

AT&T plans to invest up to $1 billion in California through the end of
2008 to upgrade its telephone network in the state and to launch an
Internet-protocol video entertainment service, which would compete
with cable-TV companies.

The California legislation comes as lawmakers in Washington, D.C., are
considering a bill that would make it easier for telephone companies
to get licenses for cable television service. Yet, Congress has a
short calendar this year and may not act.

Other states, including Texas, have passed similar legislation making
the licensing process simpler. If Congress does not act, analysts
expect other states to follow Texas' and California's lead.

Telephone and cable companies are fighting to sign up as many
customers as possible for a bundle of services including telephone,
cable television and high-speed Internet access, which often cost more
than $100 a month.

(Additional reporting by Jeremy Pelofsky in Washington)

Copyright 2006 Reuters Limited.

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