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<br />MAY 20 '05 15:30 FR <br /> <br />1 TO 8~818421259 <br /> <br />P.03/04 <br /> <br />May 19, 2005 <br /> <br />An Open Letter to City Officials in Texas: <br /> <br />As you may know, I am the author of proposed legislation that would revamp the way <br />Texas cities are compensated by video providers for use of public right-of-way. <br /> <br />While you have likely heard all sorts of horror stories about my proposal-many courtesy <br />of cable incumbents determined to perpetuate their market dominanc&-l wanted to <br />personally share with you why I think this proposal is both timely and appropriate. <br /> <br />From the onset of the current debate, a driving motivation for me has been a sincere <br />desire to reconcile city right-of-way compensation with the reality of changing <br />technology and communications markets. Consumer migration to wireless and other <br />technologies has deteriorated cities' municipal fee payments from local telephone service <br />providers. A similar dynamic is taking shape in the video arena, where satellite <br />displacement of traditional cable TV service is causing further revenue erosion for Texas <br />cities. <br /> <br />SB 408, in my view, represents an important first step toward addressing the <br />emergiDg municipal revenue crisis that the communications technology revolution <br />has created. By ensuring new video entrants will pay cities a guaranteed 5 percent of <br />gross revenues from video services, it seeks to stabilize municipal revenues in the short <br />term and to position cities for potential revenue growth as technological alternatives to <br />traditional cable lV become more robust. <br /> <br />BeyoDd addressing cities' revenue needs, I also am seeking with this legislation to <br />stimulate additional investment and much-needed price competitiOD in the video <br />services market. Under my proposed statewide franchise concept, Texas would become <br />the most attractive state in the country for phone companies to roll out video services in <br />competition with traditional cable providers. These companies are poised to spend <br />billions of dollars nationwide to upgrade their networks for video capability. With my <br />bill, they would have additional incentive to prioritize investment to Texas. At the same <br />time, cities would continue to be fairly compensated for right-of-way oversight and reap <br />potential new economic benefits, including increased sales and property tax revenues. <br /> <br />Sadly, the real merits of this bill are being lost in the current lobby rhetoric. Therefore, I <br />have taken the liberty to provide you with the attached document that addresses <br />some of the most glaring misinformation about SB 408. I hope you will read it and <br />think about it I sincerely believe we have a unique opportunity with this bill to do <br />something positive and forward-thinking for Texas cities and consumers. <br /> <br />Sincerely, <br /> <br />(Phil King) <br />