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Current Analysis: Texas Senate Bill 5 Opinion

The state of Texas has signed Senate Bill 5, the Telecommunications Reform Act, into law. The Act cites that "significant technology changes" have occurred since Texas passed its last Public Utilities Regulatory Act a decade ago. The overhaul goes into great detail governing regulations for broadband over power lines (BPL), should electric utilities choose to provide these services. Among other changes, the Act also clears the way to deregulate all incumbent local exchange carriers (ILECs), redefining them as "transitioning companies" that can qualify as non-dominant carriers in major markets that present at least token local competition. But most important, the Act aims to bypass the traditional local video franchise system, establishing a way for the RBOCs to receive statewide video franchises. Texas Governor Rick Perry signed the legislation into law on September 7, 2005, and the next day the Texas Cable & Telecommunications Association (TCTA) filed suit in federal co urt against the Act.

According to a Current Analysis assessment, "The Texas Telecommunications Reform Act could not have represented the interests of the RBOCs better if they had written it themselves. The actual punch in the legislation - deregulating ILECs and allowing them to bypass the local video franchise system by applying for statewide franchise licenses - is sugarcoated by a lengthy treatise on BPL. BPL is a still nascent service that's years away from becoming a mainstream market competitor, and that's assuming that energy providers go full-throttle with technology development and buildout. The legislation at key points so clearly benefits the RBOCs at the expense of cable providers that entire sections appear ripe to be torpedoed in the courts. The cable industry, in its federal suit, filed almost immediately after the legislation was signed into law in the federal U.S. District Court, Western District of Texas, Austin division, seeks to do just that."

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