SBC Wins Big in (Texas) State House

By Sanford Nowlin Express-News Business Writer

The Texas House of Representatives voted 135-6 Sunday to pass a controversial bill that would make it easier for the state's biggest phone companies to offer pay television service.

Supporters of the measure -- which the Senate approved with minor differences Wednesday -- said it would create jobs and investment by letting SBC Communications Inc. and Verizon Communications Inc. each negotiate a single franchise with the state to offer video.

Under current rules, the companies must negotiate agreements with each city they plan to serve -- just as their cable competitors did. But San Antonio-based SBC and New York-based Verizon have argued that reaching individual agreements would slow their rollouts.

"(With passage of the bill), we're going to see competition increase year after year," said Rep. Phil King, R-Weatherford, who championed the measure. "It will be kind of like what happened with local service and long distance."

But cable carriers hotly opposed the measure, as did some cities. They said it would give the phone giants an unfair advantage, let them bypass low-income neighborhoods, and strip money from city coffers.

"This bill is such a giveaway, we should be calling it SBC 21," Houston Democrat Rep. Harold Dutton said, playing on the name of the bill, SB 21.

The measure also allows SBC and other dominant phone companies to increase prices for add-on phone service in large markets like San Antonio and in smaller ones where they can show they face competition.

Under the bill, basic phone rates would remain frozen until the 2007 legislative session.

SBC and Verizon lobbied vigorously for the new franchise rules. Each is spending billions to break into the video business as cable carriers chip away at their phone markets.

If the bill passes, Texas will be the first state to simplify its video franchising rules to make it easier for SBC and Verizon to roll out video. The Federal Communications Commission also is expected to weigh in on the matter.

Lawmakers debated a similar measure during the regular legislative session, but it died when the House and Senate couldn't iron out major differences.

Observers said the new bill also could die if lawmakers can't complete work on new school finance rules. School funding is the main focus of the

30-day special legislative session that ends Wednesday.

Lt. Gov. David Dewhurst on Friday said the Senate won't act on any other bills until it can consider school finance changes. The Senate would need to approve alterations made to the bill in the House before it can be signed into law.

NOTE: For more telecom/internet/networking/computer news from the daily media, check out our feature 'Telecom Digest Extra' each day at

formatting link

. Hundreds of new articles daily.

*** FAIR USE NOTICE. This message contains copyrighted material the use of which has not been specifically authorized by the copyright owner. This Internet discussion group is making it available without profit to group members who have expressed a prior interest in receiving the included information in their efforts to advance the understanding of literary, educational, political, and economic issues, for non-profit research and educational purposes only. I believe that this constitutes a 'fair use' of the copyrighted material as provided for in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond 'fair use,' you must obtain permission from the copyright owner, in this instance, San Antonio Express-News.

For more information go to:

formatting link