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Telcos: Lose In Texas, Win In D.C.?By: David Sims Congress might help telcos compete with cable and satellite video. At the end of May the Texas Legislature recessed without taking action on a measure to let phone companies "obtain a statewide TV franchise instead of having to negotiate franchises with every individual city and town," according to the Columbian [http://www.rednova.com/news/display/?id=154476&source=r_technology]. Petitioning the public utilities commission for a statewide video franchise license rather than negotiating deals with each community is "a process that can take between six and 18 months," according to Colin C. Haley of OpticallyNetworked [http://www.opticallynetworked.com/news/article.php/3508781]. Cable companies in Texas argue that they had to negotiate deals with local municipalities. Now it appears Congress might give what Austin taketh away. According to Reuters, the U.S. House and Senate yesterday each introduced similar bills making it easier for telephone companies to launch video service to compete with cable and satellite services. Specifically, the measures would eliminate the despised requirement for companies like Verizon Communications and SBC Communications Inc. to seek authority from each and every village, town and city they want to offer service, a process which could take years and rack up prohibitive costs in Texas alone. Verizon, SBC and other telcos -- BellSouth -- want to be able to obtain one statewide license to offer service. Before Texas, Virginia had declined to help the telcos in their petition for an easier time of it. The next battleground states are New Jersey and California. Cable companies are determined to corner the market on triple play -- TV, phone and high-speed Internet access. "The only option the phone companies have to survive is to offer the same bundles," Steve Kirkeby, a telecommunications analyst for J.D. Power & Associates tells Columbian. He calls the regional Bells "underdogs in the fight," given cable's 40-year head start in TV. BellSouth certainly was happy about the Congressional initiative. "We applaud the introduction of these bills as, when enacted, they will provide benefits to consumers by streamlining competitive entry into the video market," said Herschel Abbott, BellSouth's vice president for governmental affairs. Abbott said he'd "prefer that these legislative efforts be included in the update to the Telecommunications Act of 1996 which is being discussed by the Congress," but at this point he'll take what he can get. "I am confident that this bill would promote competition and lower prices for consumers by allowing alternative television service providers the opportunity to widely offer their services," said Rep. Albert Wynn, a Maryland Democrat who co-authored the House measure. In his 2004 re-election campaign Rep. Wynn received contributions [http://www.opensecrets.org/races/sector.asp?ID=MD04&cycle=2004&special= N] of $103,762 from the "Communications/Electronics" sector. The National Cable and Telecommunications Association contributed $10,000, Verizon gave $8,000 and SBC $7,000 to the congressman. The measures introduced in Congress would also "permit cities and towns to seek so-called franchise fees from the new entrants. Verizon and SBC have diverged over their willingness to pay those fees, which cable operators already pay and can be up to 5 percent of gross revenue," Reuters reports. Late last year Haley reported that SBC "will launch TV over fiber by late next year," with the goal of making the network available to 18 million households by the end of 2007. "The fiber network will give SBC enough bandwidth to offer for a triple-play bundle of TV, phone and high-speed Internet services," Haley says. |