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California Bill Seeks to Jumpstart Cable Competition

By Martin H. Bosworth
ConsumerAffairs.com

June 1, 2006

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With competition between telecommunications companies and cable companies heating up, California's state assembly has passed a bill that's billed as leveing the competitive playing field.

The legislature voted 70-0 to approve a measure that eliminates the need for cable companies to negotiate local franchise rights with each city where they want to provide services.

That means other cable companies -- and telephone companies wanting to enter the cable TV business -- can more easily jump into a region and start offering their services.

The new legislation prohibits denying or degrading service to any customer based on income level, as well as preventing existing franchises from closing shop due to an influx of competition.

The bill must pass the California state Senate and be signed by Gov. Schwarzenegger before it becomes law.

"We must bring cable franchising and TV technology into the 21st century," said Assembly Speaker Fabian Nunez, who co-authored the bill. "At the end of the day, consumers will keep some of their hard-earned dollars because we have created competition in a market where there was none."

Nunez also authored a recently passed law that requires wireless networking device manufacturers to warn buyers of the dangers of letting other users "piggyback" on their network connections.

The pitched battle between municipalities and service providers over cable competition is one of the big issues addressed in the updates of the Telecommunications Act currently sitting before Congress.

The House version of the update, authored by Rep. Joe Barton (R-TX), grants telecom franchises "national status," allowing them to immediately set up local franchises without going through the same regulatory process as existing cable companies.

The National Cable and Telecommunications Association opposes the move, arguing that "there should be a level playing field for all providers. The Bell monopolies don't deserve to be treated like startups."

The Barton bill is expected to come before the House for a vote the week of June 5th.

Meanwhile, the Senate version of the new legislation, authored by Commerce Committee head Ted Stevens (R-AK), would grant local municipalities the right to create their own Wi-Fi networks, without having to seek state approval.

Many telecom companies have opposed moves by city governments to develop their own wireless services, such as BellSouth's attempts to shut down the emergency free Wi-Fi system currently running in New Orleans.

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