Opponents Raise Concerns Over Texas Telecom Legislation

The Texas House on Sunday passed SB 21, a measure that, according to one group, provides SBC Communications Inc. and Verizon Communications Inc. with unprecedented competitive clout.

The House passed SB 21 on Sunday, just days after it was approved by the Texas Senate.

You may recall that last May, a similar bill died on the vine when the Texas legislation did not take action on a measure that would have provided large telecommunication companies such as Verizon and SBC with the ability to obtain single video franchises that would cover the entire state.

Because the bill did not become law, the telecoms, in their efforts to launch their respective video over Internet Protocol services, had the unenviable and lengthy task of negotiating franchise agreements with every municipality in the state.

That apparently will all change with the passage of SB 21.

Opposition to the bill has come strongly and swiftly from two major sects: competitive local exchange carriers (CLECs) and the Texas cable industry.

Indeed, the chairman of the Texas Cable & Telecommunications Association (TCTA), which represents 24 cable companies in over 800 Texas cities throughout the state, issued a release yesterday denouncing SB 21 as “anti-competitive” for the state’s cable and video providers.

“Today, sound public policy, regulatory parity and service protections for Texas consumers went out the door with the passage of SB 21,” Tom Kinney, chairman of TCTA and president of Time Warner Cable-Austin, said in a press release on Sunday. “With the passage of SB 21 in the Texas House, SBC and other big phone companies achieved unprecedented competitive advantages. Consumers benefit when there is a level playing field. This legislation gives every economic and regulatory advantage to big phone companies.”

Also, TEXALTEL, a trade association comprised of CLECs doing business in Texas, released a statement on Friday vigorously opposing SB 21.

“This legislation threatens thousands of jobs and will significantly threaten competition in telecommunications in Texas as many competitors will find this legislation only provides roadblocks to their providing service in Texas,” the release states. “While many urban business consumers have choices and can simply pick another communications provider if SBC increases prices or provides poor service, most businesses, especially small businesses located in suburban or rural areas of the state will be left stranded and at the mercy of an unregulated monopoly.”

Rural customers of Verizon and SBC will bear the brunt of the legislation and can expect their “local service rates double or triple,” according to the statement

Nevertheless, other organizations, such as FreedomWorks, have thrown their support behind SB 21, touting it in a press release as a “clear step toward modernizing telecom law in Texas and providing real video choice.”

According to the statement, Freedomworks’ Texas State Director Tina Peyton provided, in part, the following: “It’s time to put consumers in the driver’s seat and allow them to take advantage of more choice, better service, and new technologies”

This is certainly a huge victory for SBC and Verizon, as they have fought long and hard for what they term “a level playing field” in their ability to launch video services to complete the vaunted “triple play” of providing voice, data and video all in one bundle.

While some may argue that the issue will be moot with the rewrite of Telecommunications Act of 1996, it’s important to note that it could be several years before we see some new version of the federal law passed.

As always, TMCnet.com will continue to monitor the situation and will report on any new developments. Stay tuned.


Ted Glanzer is assistant editor for TMCnet. For more articles by Ted Glanzer, please visit: