Courts

Cable Firms’ Win in Texas Sealed By Supreme Court

6/25/2012 12:01 AM Eastern

Washington — In a victory for the Texas Cable Association
and the nation’s second-largest cable company, a
federal appeals court ruling that Texas’s franchising law
unconstitutionally discriminated against Time Warner
Cable and other incumbents will stand after the nation’s
highest court declined to hear an appeal.

That means cable
operators serving
many of the
state’s largest cities
won’t have to wait
until their current
franchises expire.
According to a
TWC spokesman,
immediately after
the 5th U.S. Circuit
Court of Appeals
issued its decision
last Monday (June
18), the cable operator
filed for stateissued
franchises
in Dallas, Corpus
Christi and Irving.

The U.S. Supreme
Court refused to
hear a Texas Public
Utility Commission appeal of the 5th Circuit decision that
had upheld a challenge to the statute by Time Warner Cable
and the TCA.

Texas’s uniform statewide franchising law allowed
new entrants and overbuilders to apply for a franchise
to operate anywhere in the state — but barred incumbent
cable operators from statewide franchises until
existing municipal franchise deals expired. TWC is the
state’s principal cable incumbent.

After the cable entities took the measure to court,
but before oral argument could be heard in the 5th Circuit,
the legislature amended the law so that incumbent
cable operators could abrogate their existing
municipal franchises. But that only applied in cities
of fewer than 215,000 people, excluding cities such as
Dallas, Lubbock and Corpus Christi.

The appeals court decided “provisions excluding incumbents
from a statewide franchise violate the First
Amendment.”

“The Texas Cable Association is extremely pleased that
this long legal battle is over, and that federal courts on
both the district and the appellate levels vindicated our
argument that the 2005 statute is unconstitutional because
of its disparate treatment of video providers in Texas,”
association spokesperson Kirsten Voinis said.

Texas operators were the big beneficiary of the decision.
While the decision might discourage other states
from adopting similar laws insulating municipal franchise
agreements, Texas was unique in requiring that incumbents
ride out their current deals, according to the
National Cable & Telecommunications Association.

The Texas Cable Association believes the decision
should have some wider application. According to attorneys
there, the decision means “at a minimum” that at
least in states covered by the 5th Circuit (Louisiana, Mississippi
and Texas) “any provision of state law requiring
more from an incumbent than a new-market entrant is
unconstitutional and unenforceable.”

TCA also argues that the decision recognizes cable as
a First Amendment speaker deserving of the highest level
of protection against discriminatory legislation.

September