• by Tom Siebert , October 4, 2006

California became the eighth state in the union to sign a bill encouraging competition in the cable TV industry last Friday. Governor Arnold Schwarzenegger signed a bill allowing statewide certification for video services. It takes effect Jan. 1, 2007. Some cable advocates hope this will translate into a national referendum.

Previously, companies seeking to enter the marketplace in California were required to negotiate individual agreements with each town, city or municipality.

The new law updates a 40-year-old California law restricting the ability of telecommunications companies to enter the state's cable TV market, worth roughly $5 billion annually.

The law is a major victory for telecom companies AT&T and Verizon, which strongly lobbied for a change. They now have the ability to enter the nation's largest cable market and challenge the state's current major players: Comcast, Time Warner and Cox Communications. The revised law will also allow those cable companies to shift to the statewide method for gaining approval.

One consumer advocacy group applauded California's decision and said it was launching a pledge drive to prompt the U.S. Senate to follow suit.

"This is great news for California consumers," says Jim Conran, executive director of Consumers for Cable Choice. "But we're still trying to get a federal bill through to help everybody in the country."

Conran said that the House had passed a similar bill, but "politics" were holding the Senate from approving it. "There's a level of politics between different factions," he says. "A lot of the Democrats didn't want to give the Republicans an issue to campaign on this November."

Another issue, Conran notes, is that many senators are trying to tie Net Neutrality--which commits Internet service providers to providing equal access to all Web sites--to legislation that could relax rules for telecoms hoping to enter the cable television sweepstakes.

"We feel Net Neutrality is a totally separate issue," Conran adds. "But if we have to, there are 42 states to go, and we're going to push on through each of those states."

A recent study by the University of Berkeley estimates that increased competition in the San Diego region would save area residents between $67 million and $100 million.

"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."