Research & Commentary: State Video Franchise Reform in Texas

Published May 12, 2011

Current cable television franchise laws in Texas favor new video service providers over existing ones by not allowing existing service providers to enter into statewide franchises. Requiring providers to negotiate with every individual city or town is time-consuming and expensive, creating an unnecessary barrier to competition.

Allowing all providers to franchise with the state rather than each local authority would make it easier for telecommunication services to expand into currently underserved areas.

Changing the state’s franchise authority laws in this way and reducing other regulations on the telecommunications industry would create more competition, ultimately helping keep costs down for consumers and spurring the industry’s expansion throughout the state.

The following documents provide more information on state video franchise reform.


No. 112 The Consumer Benefits of Video Franchise Reform in Illinois
This Heartland Institute Policy Study describes how video franchising reform would benefit consumers. The study notes a “typical Illinois household with a cable subscription would save $103 a year due to lower prices, plus gain $12 a year in services valued over and above the amount paid for them, for total consumer benefits of $115 a year.”

Franchise Reform Bills Snowball in the States
This article from InfoTech & Telecom News, published by The Heartland Institute, notes numerous states are considering franchise authorization reforms. The article notes, “Wisconsin state Rep. Phil Montgomery (R-Green Bay), cosponsor of his state’s video franchise reform initiative, said statewide franchising will introduce the benefits of the market not only to video but to broadband services as well. Bipartisan support is reflected in the wide margins by which franchise reform bills are passing, Montgomery said.”

Statewide Video Franchising Legislation: A Comparative Study of Outcomes in Texas, California, and Michigan
This study by the University of Minnesota looks at the pros and cons of statewide video franchising reforms. It notes such reforms could “result in a modernization of the video infrastructure of many communities during a time of rapid technological change”

Florida Passes Franchise Reform
This article from Budget & Tax News reports on Florida’s decision to allow state franchise authorization: “Florida is the third state this year to set up a process that allows new cable TV competitors to apply for a ‘franchise’—ostensibly government authorization—to launch service anywhere in the state. Until now, new entrants in Florida had to negotiate franchises with individual cities, towns, and municipalities, a time-consuming and expensive process critics say presented a barrier to entry.”


For further information on this subject, visit the InfoTech & Telecom News Web site at or The Heartland Institute’s Web site at

Nothing in this message is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. If you have any questions about this issue or the Heartland Web site, you may contact Director of Government Relations John Nothdurft at 312/377-4000 or [email protected].