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State Laws/Franchising

Texas-Sized Fight Over Law

1/27/2006 6:27 AM Eastern

Even as its members are availing themselves of the terms of SB5, the Texas state law that created statewide franchising, the Texas Cable & Telecommunications Association has expanded its legal fight against the law, now filing a state court challenge.

The latest suit, in Travis County District Court, asserted that the state law violates the due-process, equal-protection, contracts and free-speech sections of the state constitution. The suit targeted three commissioners of the state Public Utility Commission, the state body charged under the new law with authorizing franchise applications.

The suit keyed on the fact that new providers -- especially bill-backers AT&T Corp. and Verizon Communications Inc. -- can enter the video market without the same regulatory burden as incumbent operators. The new providers face no build-out or universal-service requirements, among other regulatory differences, the suit argued.

Meanwhile, incumbents must meet the terms of current municipal franchises, but they are free to also apply to operate under state rules once those franchises expire. Incumbent operators have availed themselves of that opportunity, including TCTA members Time Warner Cable, Cox Communications Inc. and Cable One Inc.

This is the second legal challenge filed by the lobbying group. A suit filed in U.S. District Court for the Western District of Texas in Austin in September has now been amended. Operators filed a motion for summary judgment on their argument that the new law violates federal law and the U.S. Constitution. Opponents -- which include Verizon, AT&T and overbuilder Grande Communications Networks Inc. -- have filed arguments seeking dismissal of the federal case.


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