Even Video Is Big in Texas
Guadalupe Valley Communication Systems LP, the cable subsidiary of Guadalupe Valley Telephone Cooperative Inc., has been granted the first state-issued cable and video franchise, Light Reading has learned. This gives the carrier consent to provide television services in several cities simultaneously without having to seek permission from each local municipality.
It sounds mundane, but this paper-pushing is a big deal because state-issued franchises drastically cut the time and politicking required for telecom carriers to offer video services. Guadalupe Valley applied for its franchise to offer video service to the city of Bulverde and in parts of Comal, Bexar, and Kendall counties on September 12, and the franchise was approved on Monday.
Texas, so far, is the only state to offer state-issued, statewide franchises.
Only two other carriers -- Verizon Communications Inc. (NYSE: VZ) and Grande Communications -- have applied for state-issued cable and video franchises since Texas Governor Rick Perry signed Senate Bill 5 on September 7. (See Telcos Close In on TX Video Win.) Verizon may be the second telecom carrier to get a state-issued video franchise; it expects its franchise will be granted on or around October 25 -- just 17 business days after its application was filed.
Verizon now says it expects its FiOS TV service to be available to around 400,000 North Texas households with more than 1 million potential viewers by the end of 2006. Verizon spokesman Bill Kula says its franchise application involved "the largest base of households of any agreement we've received or applied for to date."
The carrier first offered its FiOS TV service in Keller, Texas, on Sept. 22, some seven months after getting its local video franchise. (See Verizon Sets TV Precedent.) But after it is granted a state-issued franchise, the carrier announced it will now offer services to 21 additional cities including Allen, Carrollton, Colleyville, Coppell, Denton, Double Oak, Flower Mound, Fort Worth, Garland, Grapevine, Hebron, Highland Village, Irving, Lewisville, Lucas, Murphy, Parker, Plano, Rowlett, Southlake, and St. Paul.
Interestingly, Verizon may not just be competing against cable companies and satellite providers when it offers video service. According to documents filed with the Texas Public Utilities Commission, Grande Communications has signaled its interest in offering video services to some of the same areas as the nation's largest phone company.
Grande has listed Alamo Heights, Allen, Austin, Balcones Heights, Beverly Hills, Carrollton, Castle Hills, Corinth, Corpus Christi, Denton, Fairview, Flower Mound, Frisco, Hewitt, Kirby, Little Elm, McKinney, Midland, Odessa, Olmos Park, Pflugerville, Round Rock, San Antonio, San Marcos, Terrell Hills, Waco, and Woodway as the Texas cities and towns where it intends to someday offer cable or video service.
Noticeably missing from the franchise fray is SBC Communications Inc. (NYSE: SBC), which says it will pass millions of homes with IPTV service, but hasn't given a clue as to where it will offer video services. (See SBC on TV Franchise Regs: We're Immune.)
It's noteworthy, too, that just because carriers are getting state-issued franchises doesn't mean they actually will turn on video services anytime soon. Texas PUC spokesman Terry Hadley says the carriers are "authorized, but not obligated" by the cable and video franchise.
As carriers around the state line up for the ability to give cable MSOs a run for their money, politicians hope the telco video craze will kick back some revenues to the state and local gummint, as they say around here.
State Representative Phil King said at a press conference last month that having more companies in the fight to provide triple-play services will be good for Texas. After the passing of Senate Bill 5, King said: "We’re estimating some 13,000 permanent jobs being created in Texas over the next few years as a result of this bill… We’re expecting over $2 billion -- billion with a B -- $2 billion of new investment in Texas over the next couple of years, as a result of this statute getting out of the way of technology and industry."
— Phil Harvey with an H, News Editor, Light Reading