US Telcos Go to Court in Bid to Launch Cable TV

17 May 2005

The Lone Star State of Texas is the legal battleground chosen by US telecoms giants Verizon and SBC Communications in their bid to overturn legislation that severely hinders them from launching a television service.

As it currently stands, the law requires any company offering cable TV service to gain individual approval from thousands of municipalities, a costly procedure both in terms of cash and time.

The telco titans aim to bulldoze their way through this irritating inconvenience and have started to carpet-bomb the Texas legislature with paid lobbyists rooting for the fast-tracking of their launch plans.

The issue will be debated and voted on by the Texas House of Representatives over the next several days. Its decision could affect similar TV rules in other states of the union.

Meantime, incumbent Texan cable companies, among them Time Warner and Comcast, are less than enthused at the planned incursion into their territory. They have responded in like manner, unleashing the hounds of PR and lobbying onto the unfortunate politicians.

The phone companies, of course, have their political friends, one of whom is Republican Representative Phil King who has sponsored a bill on their behalf. It also helps that King happens to be chairman of the House Committee on Regulated Industries.

Nor is the telco's case hindered by the fact that Texas is SBC's home state, within which the company musters more than one hundred and twenty registered lobbyists, more than one for every two lawmakers.

Representative King gleefully points out that Texas has long been a trendsetter in deregulation, taking steps in 1995 to deregulate telecommunications ahead of the federal government, later removing the shackles limiting electric power. "Video [TV] is just the next step," he says.

But spare a moment's sympathy for the Lone Star State's overworked lawmakers. The Texas legislature is scheduled to adjourn at the end of this month and isn't set to meet again until January 2007.

Data sourced from Wall Street Journal Online; additional content by WARC staff