Tex. Lawmakers Pass Video Bills; Final Nod Awaited
Tex. lawmakers again passed video franchise rules that would speed Bells’ entry into pay TV. Passage came after a months-long delay and amid a summer-session squabble over education. Chances of final approval rose this time when Gov. Rick Perry (R) indicated he'd consider breaking the logjam by signing the bill. Previously, the governor and Lt. Gov. David Dewhurst (R) signaled they'd block any bill, including video franchising, until education initiatives pass (CD July 21 p2).
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The Tex. Senate late Tues. passed a bill to streamline the approval process for selling TV service, said Daniel Womack, spokesman for Sen. Troy Fraser (R). Fraser earlier wrote a video franchising bill passed by both bodies but never approved by the governor. On Wed., the House passed a similar bill 144-1, according to an aide to Speaker Tom Craddick (R). As early as Thurs., the Senate may vote to accept the House bill, rather than go through reconciliation, Womack told us.
A spokesman for Gov. Perry said he might break his promise and sign the video bill, opposed by cable firms but backed by Bells including SBC. “Any bill that may reach [Perry] at this point, he’s going to keep his options open as to whether or not he'll sign it or veto it until he sees how things shake out over the next few days,” his spokesman, Robert Black, said in an interview: “There are a number of pieces of legislation… that he’s very interested in, that have not passed.”
SBC and Verizon, seeking to sell pay-TV in many states, lauded the move. Franchising would “enable companies like Verizon to compete head-to-head with existing cable providers,” Verizon Southwest Region Pres. Steve Banta said in a prepared statement. If the bill is signed into law, Tex. would be the first state to regulate franchising, removing some municipal oversight power. “Lawmakers recognize the potential in this marketplace,” said SBC Tex. Pres. Jan Newton: “Video represents the next great frontier in our industry.”
There’s a chance the video bill will stall again. “Whether [Perry] signs it or holds to his commitment that he’s stated earlier, we don’t know,” Tex. Cable & Telecom Assn. Vp-Govt. relations Kathy Grant told us: “Obviously we're going to ask him to do that [not sign]. It should be rejected on the basis that the legislators have not taken care of the business that they came to take care of.” One analyst said that was unlikely: “There is always the slight possibility it could still somehow again be held up, particularly given the continuing fight over school-financing legislation,” Legg Mason’s Blair Levin said in a client note: “But that does not appear likely.”
Bells now have a “green light on [the] cable business,” said Stanford Washington Research Group’s Paul Gallant, like Levin a former FCC staffer. It would be “a mild positive for Tex. telcos SBC and Verizon, and a mild negative for Tex. cable operators” including Charter, Comcast and Time Warner, he told clients.
Texans haven’t ended their legislative squabbling. Craddick said the House shouldn’t approve a Senate education bill just to take action on the issue. An aide called the Senate bill a “watered down” version of House legislation. “The House of Representatives will not be a party to passing legislation that does not contain meaningful tax relief and proper education reforms,” the speaker said in an e-mailed statement.