"This bill is full of unintended -- and, in some cases, intended -- consequences that add up to extremely bad public policy," said Tom Kinney, chairman of TCTA and president of Time Warner Cable, Austin. "The most disturbing aspects include provisions that sanction redlining by the big phone companies."
The cable industry had urged that all telecommunications companies be treated equally when they deploy broadband to communities and that full build-out without regard to demographics be required. SBC and Verizon fought this provision, according to TCTA. "The big phone companies triumphed in their attempt to get the state to sanction redlining," Kinney said.
TCTA leaders charged that late last year, SBC announced plans to build fiber-optic networks that will deliver voice, high-speed Internet and television services under an initiative called Project Lightspeed. In reports to investors in November 2004, said TCTA, the company illustrated its plans to target only 5 percent of "low-value" consumers, while deploying the advanced services to 90 percent of "high-value" neighborhoods and to 70 percent of "medium-value" neighborhoods.
"SBC and Verizon want to come into communities and cherry-pick wealthy neighborhoods at the expense of poorer areas where new services can help bridge the Digital Divide. State-sanctioned redlining of poor people is contrary to everything we stand for as Texans," Kinney said. "Now that HB 3179 is apparently headed for a debate on the House floor, we urge the full House to hold firm against the big phone companies' efforts to implement legislation that is bad for Texas consumers."
TCTA said it opposes another key component of the bill as well. "Implementing a statewide video franchising system is a major shift in public policy and needs further study," Kinney said. "This change would replace the local franchise system and has not been studied well enough to take forward at this time."
Since its inception decades ago, cable has been granted franchises by local communities. The municipalities benefit from this structure by getting franchise fees collected from cable customers by the cable operators and passed on to the cities. These fees, which total hundreds of millions of dollars a year across the state, are used by the cities to help fund fire, police and other public needs.
HB 3179 would overturn the current system and remove local control of the franchising process, said TCTA. Under the bill, the State of Texas would be in charge of statewide franchising of the operators.
"We're very concerned about unintended consequences of such an upheaval -- not the least of which might be hurting local communities' ability to meet their specific needs," Kinney said.
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