IP Democracy: Telcos Lose Statewide Franchising Fight in Texas

It’s all uphill now for the telcos seeking to get out from under the time-consuming and expensive process of obtaining local cable franchises. The Texas legislature passed on a bill that would have given phone companies seeking to enter the video business a breezeway past the onerous haggling with local government officials required by law for multichannel video distributors.

While the groundbreaking fight in titan telco SBC’s home territory was portrayed as a battle between cable operators, who long ago went through the process to get the prized franchises, and arch-rival phone companies, municipal governments probably played the biggest role in defeating the statewide measure. Despite SBC’s enormous political swack in Texas, city governments hold the trump card, an object lesson for the telcos as they seek to minimize franchising burdens in other states and at the federal level.

While cable claimed victory, the cities quietly took a back seat. According to the Texas Cable Telecommunications Association, operators in that state pay around $220 million in franchise fees each year to local governments, an amount theoretically used to compensate municipalities for use of public rights of way.

Posted by Cynthia Brumfield on May 31, 2005 10:41 PM to IP Democracy