With competition growing for the market of combined television, internet and phone services, phone companies are in a pitched battle in the Texas Legislature with the cable industry over local telecommunications controls. Several states and Congress are watching the fight, as it will likely serve as a model for the nation. Despite a multi-million dollar lobby effort by companies like SBC, the nation’s second largest telecommunications company, the legislature has failed to do anything due to an unrelated fight over how to fund Texas schools, though a vote could still happen as early as the end of this week.
SB 5, and its companion HB 13, has drawn significant criticism from the state’s leading consumer groups including the Texas Public Interest Research Group (TexPIRG), AARP, and Consumers Union. The groups argue the telecom law rewrite would strip away local control of franchise agreements, likely mean higher phone, internet and tax bills, more discrimination against poor and rural areas and less local control. The legislation would also deregulate telephone rates, which would likely mean an increase in rates for basic phone service. The groups are working on alternative solutions to high cable costs including giving the state the right to stop price gouging by cable and telecommunications companies and letting consumers choose just those channels they want through a la carte pricing. Several states including New Jersey and California are considering statewide franchises and former SBC executive Rep. Pete Sessions (R-Dallas) has introduced legislation in Congress to establish a nationwide franchise.
