Issues

In 2005, the Texas Legislature passed Senate Bill 5 (SB 5)bringing Texas telecommunications regulations into the 21st century and elevating Texas as a national leader in telecommunications reform. Texas took a step forward to promote competition and innovation, and has paved the way for new choices and improved technologies for consumers. 

With the passage of SB 5, Texas has become the only state to offer a statewide franchise for those providers seeking to provide video services that compete with existing cable services.  The Texas Legislature sought to encourage telecommunications competition by eliminating barriers to entry and deregulating prices. 

Past laws and regulations have limited competition, innovation and investment in telecommunications and video.  Before SB 5, video service providers would have to negotiate agreements with each city to secure cable franchises, an expensive and time consuming process.

With the passage of SB 5, Texans are already benefiting from the increased competition and lower prices in telecommunications, as well as more technological advances. The Texas economy has also seen a dramatic increase in investments and more jobs as a result of this legislation.

Now policy makers from other states, and at the federal level, are using Texas as a model and are looking to adopt similar reforms and implement similar changes to help better meet the economic challenges of the 21st century. Florida and Iowa have since passed bills setting up statewide video franchises, and California has introduced similar legislation.  U.S. Representative Joe Barton from Texas has introduced House Bill 5252, the Communications Opportunity, Promotion and Enhancement Act of 2006 in the U.S. House of Representatives.

Senate Bill 5 overhauled Texas telecommunications subsidies, pricing and tax regulations. It laid out provisions that created a statewide video franchise program to be administered by the Public Utilities Commission (PUC).  The state now allows existing electric utilities to offer broadband Internet access over power lines and laid out the necessary guidelines to operate systems. Certain local telephone markets have been deregulated and are now free to set rates for residential telephone services based on market prices. The legislation also reduced costs, gaining easier access to the video programming market.

By reducing these barriers to entry and deregulating pricing, SB 5 helped open the telecommunications market in Texas to competition. Texas is already seeing instances where multiple service providers are competing to offer consumers packages with voice, internet and video access at competitive prices.

AT&T (formerly SBC) has announced plans to make $800 million in communications infrastructure improvements in the state. Their plans include developing high-speed Internet access in rural areas of the state. AT&T has also announced U-Verse service, which is available in San Antonio and Houston.

Verizon had invested $1 billion to reach new homes with fiber across the state and was approved for a statewide video franchise which helped accelerate the process.  Now, Verizon has made FiOS TV service available and has plans to reach even more homes by the end of the year.

The Texas Legislature has ensured that Texas is at the forefront of the telecommunications industry, bringing thousands of new jobs and billions of dollars in economic development to the state.  Texans across the state will soon be able to enjoy increased quality and quantity of telecom services, new technologies, lower prices and expanded choices in voice, data and video services.