Bells' Strategy Of Video Services May Run Into Local Roadblocks; Verizon, SBC may face lengthy city approvals to sell video to the rich.(A)

Publication: Investor's Business Daily

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COPYRIGHT 2004 Investor's Business Daily, Inc.

Byline: REINHARDT KRAUSE

Plans by local phone companies to jump into the pay-TV video business might run into a key regulatory hurdle: getting a green light from local governments.

Local Bells Verizon Communications and SBC Communications are set to spend billions of dollars to build fiber-optic networks in residential areas, enabling them to provide video services. They're reacting to competition from cable TV firms, which are rolling out Internet-based phone services.

When cable TV first spread across the nation in the late 1970s and early '80s, companies negotiated contracts, or franchises. Those deals gave cable TV firms exclusive rights to wire communities.

Although cities awarded cable firms monopolies, contracts needed renewal every 10 years or so.

Satellite TV broadcasters in the...

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