California Gov. Arnold Schwarzenegger signed a bill Friday creating a single statewide market for cable television by eliminating city-by-city franchises, opening the market to competition from telephone companies.
“Increased competition will translate into better service and lower prices for everyone,” Schwarzenegger said in a statement.
“This bill will add another significant player into the cable television marketplace and help speed the spread of new and innovative technologies across the state,” he added.
The bill by Assembly Speaker Fabian Nunez allows telecommunications companies to obtain a single permit to deliver Internet and television services to homes and businesses.
California previously required cable-TV providers to obtain franchises at the local level, a requirement that impeded competition from telephone companies.
Telephone and cable companies are fighting to sell bundled services including telephone, cable-TV and high-speed Internet access, which often cost more than $100 a month.
Telephone companies including AT&T Inc. have lobbied to eliminate laws requiring franchise deals with municipalities so they may offer television service.
AT&T plans to invest up to $1 billion in California through the end of 2008 to upgrade its telephone network in the state and to launch an Internet-protocol video entertainment service, which would compete with cable-TV companies.
“This is the first time California will see real competition in the TV/video marketplace,” AT&T California President Ken McNeely said. “This law replaces outdated, 43-year-old legislation that hasn’t kept pace with technology, or consumers’ desire for choice.”
Verizon West Region President Tim McCallion said the new law allows Verizon Communications Inc. to move forward with its expansion of a fiber-optic network in California.
“The new law also provides the certainty for Verizon to commit hundreds of millions of dollars in additional investment to accelerate fiber deployment in California, creating hundreds of new jobs and stimulating our state’s economy,” McCallion said.
