Pro-Telco Bill Advances in Texas

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Legislation to deregulate telephony and create statewide video franchising is moving ahead quickly in Texas, where the House in session Sunday approved the bill by a 135-6 vote.

That chamber made amendments to the bill, so it now needs to go back to the Senate -- a chamber that has already vetted the bill -- for a final vote.

If the Senate approves the changes and approves the bill on a two-thirds vote, Texas -- where SBC Communications Inc. and Verizon Communications Inc. are based and, therefore, have the strongest lobbying influence -- will become the first state to change its laws to ease Verizon's move into video service.

Other states issue franchises at the state level, such as New Jersey, but after local communities name the vendor they want regulated.

The Texas Cable & Telecommunications Association’s members said the new bill strips away video-service-quality safeguards and other customer protections, while possibly raising phone rates in the state. The bill gives every economic and regulatory advantage to big phone companies, the association added.

"Today, sound public policy, regulatory parity and service protections for Texas consumers went out the door," said Tom Kinney, TCTA president and president of Time Warner Cable-Austin, in a prepared statement.

The bill will most impact cable incumbents Time Warner -- the state's largest operator, with an estimated 18% market share, which will increase following its Adelphia Communications Corp. acquisition, according to analysts -- along with Cox Communications Inc., Charter Communications Inc., Classic Cable, Midcontinent Communications and Cable One Inc.

The bill could also impact EchoStar Communications Corp., which currently has a partnership with SBC to sell the video element of the telco's service bundle, analysts noted.

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