Policy

Franchise Reform Stalls in Texas

7/28/2005 8:00 PM Eastern

A bill to reform cable-franchise rules remains stalled in the Texas Legislature, a victim of that state's acrimonious debate over education funding reform.

Virtually identical bills are lined up in the state House and Senate, and powerful leaders such as Lt. Gov. David Dewhurst have publicly expressed support for taking up the telecommunications reform bills.

Both current bills would create statewide cable franchising for newcomers, but would also deregulate local phone rates and authorize broadband-over-powerline (BPL) service, among other things. But through last week, some of those same legislative leaders were blocking action on any bill but school-funding proposals.

The House bill was voted out of the regulated industries committee on July 26, while the senate bill was moved out of the business and commerce committee on July 21. As of early Friday, that was the last formal action on either bill.

Officials of Verizon Communications Inc., which prompted the bills, still expressed hopes last week that the logjam would break.

'SUFFICIENT TIME' REMAINS

“There's still sufficient time for activity to take place,” said spokesman Bill Kula, who noted the second special session of the legislature is not scheduled to end until Aug. 19.

“We're willing to provide any additional information so they can make an informed decision on telecommunications,” Kula said.

The state's cable operators argue the bill amounts to special treatment to cable newcomers and will raise basic phone rates.

As the legislative picture works itself out, Kula said product testing continues to Verizon employee homes in Keller, Texas. Verizon is on schedule for a commercial cable launch in the state in the fall, he said.

Meanwhile, the telephone company continues to pursue traditional franchising elsewhere, gaining traction last week in Virginia and Maryland, where two county governments took formal steps toward franchise approval.

Verizon has submitted its franchise proposal to Fairfax County, Va., a move that could lead to a cable franchise for the area by early fall.

According to the county procedure, the franchise package must be approved for publication, and then subjected to a public hearing before the board of supervisors can approve it.

VA. HEARING COMING

The publication is scheduled for a vote on Aug. 1, with a possible public hearing date of Sept. 26.

The incumbents in Fairfax County include Comcast Corp and Cox Communications Inc. Earlier this month a Verizon cable franchise was approved by Herndon, Va., and the telco has negotiated a pact to serve the Marine Corps base at Quantico, Va.

Verizon is already rolling out high-speed Internet in the state. It's attempting to negotiate cable rights with about 200 governments in the state.

In Maryland, the Howard County Board of supervisors voted unanimously July 28 to give its county executive 90 days to negotiate an agreement with the telephone company. Howard County is in the Baltimore metropolitan area and is served now by Comcast.

September