Thursday, August 11, 2005

Texas Legislature Eliminates Municipal Franchise Agreements for Phone Companies

RBOCs have friends in Texas!

The Legislature that Tom DeLay bought back in Texas state elections in 2003 continues to pay dividends for big corporations.

According to this article from The Austin American Statesman, the Texas Legislature rolled over for the RBOCs and did away with municipal franchise fees for video services. The bill now goes to Governor Rick Perry for his signature, which is a formality, since his administration has been pushing this legislation over the course of a couple of (regular and special) legislative sessions this year.

Understand what is at stake here.

Yes, it will save the telcos some money and that is surely important to them. But, it will also relieve them of the key requirement of municipal franchise agreements: universal service.

Relieved of the 'burdens' imposed on them by municipal franchise agreements, the telephone companies will be free to deliver video services only to those segments of the community where they believe they can make the big bucks that video services deliver. The concept of "Red Lining" comes immediately to mind. Only, now it will be legal.

Don't think for a second that it will end with the phone companies. The hot topic in regulatory circles these days is "parity" between phone and cable companies. This was made explicit earlier this week when the Federal Communications Commission (FCC) declared phone company DSL lines to be "information services" similar to the designation it gave cable companies high-speed internet lines. As a result, using the concept of parity, the FCC allowed phone companies to bar independent ISPs and carriers from accessing their DSL networks.

Look for cable companies in Texas to demand equal treatment from government there. There is already talk at the federal level of eliminating the local franchise agreement.

Once again, lawmakers (and regulators) prove themselves to be focused like lasers on servicing the interests of the giant cable and telephone companies. Make no mistake about it, this slavish fealty to these corporate interests exact a cost from consumers, businesses and local governments.

The Louisiana Public Service Commission will soon get its opportunity to prove whose interests its serves, when on September 1, it meets to consider the internal finance rules that will serve as the operating parameters of the LUS Telecommunications division.

Does the will of the people count anywhere any more? We'll get some indication shortly in Baton Rouge.

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