Jonathan Make

Committees of the Tex. House and Senate passed a video franchising bill during a 2nd special session, according to a legislative official and a cable industry source. A House panel passed Senate Bill 21, a spokeswoman for Speaker Tom Craddick (R) told us. A Senate committee also passed the bill, a cable industry official said Fri. The bill, stalled due to a squabble over education funding, is expected to be voted on by the full House and Senate as early as today (Mon). Passage of the bill, backed by SBC and Verizon, clears only one “speed bump” for the Bells’ effort to sell video service, Precursor CEO Scott Cleland told us: Winning “a political battle doesn’t always mean squat in the business world.”

Tex. legislators, called into a 2nd special session, will again consider a video franchising bill next week, a spokesman for Lt. Gov. David Dewhurst (R) told us Thurs. Gov. Rick Perry (R) called the 30-day session late Wed. after a conference committee was unable to resolve one education bill and another was filibustered by a senator, he said. Senate Bill 21 couldn’t be approved because a legislative squabble over education wasn’t resolved by the end of the first special session late Wed. (CD July 19 p1). Dewhurst has indicated he would block final approval of any bill until school funding legislation was passed. Senate Bill 21 may be voted on by the full House Mon., said a spokeswoman for Speaker Tom Craddick (R). Verizon and SBC will benefit from the plan. “The education issue is [paramount], but hopefully they'll be able to deal with that and the telecom issue,” he said. “We're moving forward on telecom legislation next week,” Dewhurst’s spokesman said.

Chances for approval of a Tex. video franchising bill remained uncertain Wed. as a Senate filibuster on a bill that must be voted on first is a possibility, legislative staffers said late Wed. Senate Bill 21, awaiting final approval by the full Senate, has fallen victim to a legislative squabble over education (CD July 19 p1). Lt. Gov. David Dewhurst (R) indicated he would block final approval of any bill until school funding legislation is passed, officials have said. A last-minute education filibuster would kill chances for video legislation during the special legislative session that was slated to end at 11:59 p.m. local time Wed. That bill would speed Bells’ entry into the pay-TV business to compete with Comcast, Cox and others.

Tex. video franchising legislation expected to get a vote Sun. by the Tex. House has imbalances in treatment of cable operators and Bells, a cable industry official said. Senate Bill 21, which Wed. passed the Tex. Senate by a wide margin (CD July 15 p2), gives Bells a head start in seeking statewide franchise certification Sept. 1. Cable operators such as Comcast and Time Warner must wait until 2008 to pursue statewide franchises, said Tex. Cable & Telecom Assn. Vp-Govt Relations Kathy Grant. Analysts said the imbalance is a slight negative for cable.

Prospects for state video franchising advanced late Wed. with a Tex. Senate vote to back deregulation. Senate Bill 21’s passage 25-3 boosts chances for entry by Bells, including SBC and Verizon, into the pay-TV business there. Cable operators unsuccessfully fought the revived bill, after similar legislation failed in late May (CD June 1 p1). The action was seen by analysts as a setback for cable.

Time Warner can end a 1993 carriage deal with Rainbow’s AMC network, under a N.Y. State Supreme Court ruling. Judge Bernard Fried issued a summary judgment in American Movie Classics v. Time Warner Entertainment on Time Warner’s claim that AMC broke the terms of the deal. “Time Warner Cable is gratified” by the ruling, it said. “We are presently evaluating our relationship with the network.” Rainbow plans an immediate appeal of the decision, which it said in a statement “will not affect the quality of programming.” The company believe it will prevail, and a spokesman declined further comment on the potential for talks with Time Warner Cable.

Microsoft, trying to sell more TV products, will unveil a set-top box software upgrade within months, Microsoft TV Mktg. Dir. Ed Graczyk said. The firm is “sharing them [the enhancements] on a private basis with [cable] operators,” Graczyk told us, declining to describe them. Comcast is the only major U.S. cable operator to deploy the current version, 1.7 (CD May 21/04 p10).

FCC Comr. Abernathy, whose term expired in 2004, said she hopes the White House will fill her job and another vacancy by the summer. “By now, everyone had hoped that there would be nominees,” she told a press briefing in her office. “I would hope we have the nominations sometime this summer.” She said the Administration understands the need to fill the vacancies, saying “it’s to everyone’s benefit” to have a complete Commission. Analysts said at a Wed. FCBA lunch prospects are dim for quick appointments, as the White House focuses on potential Supreme Court nominees (CD June 30 p2).

DirecTV, seeking to bolster HDTV service, filed a complaint with the FCC calling iN DEMAND’s proposed pricing for high-definition channels anti-competitive. The media bureau reviews complaints alleging violations of program access rules, such as Wed.’s filing, senior legal advisor Margo Domon-Davenport said. IN DEMAND derided DirecTV’s allegations as lacking merit.

The Supreme Court overturned a lower court ruling in the Brand X case, backing an FCC decision to treat cable broadband as an information service and not a telecom service. The 6-3 ruling in FCC v. Brand X is a major boost for cable operators. “We've won,” said cable consultant Steve Effros. “The law is evolving with regard to the delivery of data services, but it is clearly evolving toward a deregulatory stance.”