California Closer to Restructuring Video Franchise Rules

The California Assembly this week unanimously approved the Digital Infrastructure and Video Competition Act of 2006, which makes it easier for telcos to enter the cable market.

The bill had earlier been passed by the Assembly's Utilities and Commerce Committee and Appropriations Committee and now goes to the state Senate.

AT&T Inc. and Verizon Communications Inc. both praised the bill’s passage. The companies are the two leaders in the telco video market and have been lobbying Congress and the states to relax franchising rules so they can more easily enter the market against the cable operators.

"The California Assembly recognizes that the old-fashioned cable-TV franchise system, designed for the days of a monopoly cable-TV provider, has outlived its value and today serves only to protect the incumbent from competition,” said Verizon West Region President Tim McCallion.

Meanwhile, AT&T said it will invest up to $1 billion upgrading its telephone network throughout California by the end of 2008.

The bill, said Ken McNeely, president of AT&T California, “received overwhelming bipartisan support in the Assembly, showing that Democrats and Republicans support the benefits of video competition — lower prices, investment in the state's broadband infrastructure and new jobs for Californians.”

AT&T Inc. www.att.com
Verizon Communications Inc. www.verizon.com

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