History repeats itself

Ironically, on the day that the Texas legislature passed a piece of legislation that is very important to the future of IPTV, I was speeding across the Oklahoma plains wondering aloud if I had suddenly slipped into a time warp. Telcos wanting statewide cable franchises?

The argument is pretty persuasive, especially if you're the one charged with getting franchises. Instead of forcing telcos to go to every franchising authority (30,000 in Verizon territory alone, according to Link Hoewing) for permission to offer video in competition with cable, Texas will offer a blanket permission slip.

It's not exactly a new concept, though. The former SNET actually had a statewide franchise granted by Connecticut in 1996 as part of its effort to overbuild the state with a hybrid fiber/coax network. At the time, Cablevision, the major cable operator in Connecticut, argued that providing a state franchise would give SNET an unfair advantage. The effort, of course, stalled when SBC bought SNET and sold off the operation.

State officials hemmed and hawed, mostly because SBC vowed (probably with their fingers crossed behind their backs) during the acquisition process that they would continue to compete in video. But ultimately, the state had few options to force the company to continue operations.

Now the same crews are back asking for the same deal. Only this time, they plan to do it with IPTV and not an overbuild strategy.

From the franchising authority perspective, of course, a statewide deal is a sort of public neutering. Instead of having the authority to call telco TV executives into your chambers when citizens are forced to hit CTL-ALT-DEL on their set-tops just as the Best Gripper award is presented at the Academy Awards, statewide franchises render you powerless.

And therein lies a potential problem. While states may have their incentives for encouraging more competition against incumbent cable operators, it's at the local level where punishment is meted out. It's still very early in the process, but let's hope Texas learns a lesson from Connecticut.

E-mail me at vvittore@primediabusiness.com.