Change in Franchising Rules Sees Fast Competitive Payoff

In a testament to the positive effect of statewide franchising, Verizon began rolling out its FiOS fiber-optic based video service this week in six Texas communities, offering consumers in those areas their first opportunity for choice in terrestrial-based video, Internet and broadband services. This initial deployment spearheads Verizon’s aggressive plan to roll-out FiOS, an integrated broadband service delivered via a fiber-optic connection to the home, in 16 cities and towns in north Texas. The company hopes to pass 400,000 homes and reach 1 million viewers by the end of 2006, according to a report at Telephony OnLine. Thanks to a new law passed this summer by the Texas State Legislature, Verizon and AT&T (formerly SBC), along with some 60 other telephone companies in Texas, now have the right to apply for statewide franchises to offer video services. This changed the procedure whereby service providers had to negotiate franchise fees in each community, a process that would have slowed deployment of alternative broadband services by months or even years. Progress in Texas toward greater broadband competition is being watched closely in other states, many of which are mulling similar bills. At the federal level, Senate Bill 1504, the Ensign-McCain Broadband Investment and Consumer Choice Act, would replace local franchising with a national franchise authority.