There's millions of dollars at stake in the ongoing war to win TV eyeballs between cable and fiber optics. Now the fight has a bigger battleground.

State Rep. Trey Traviesa, R-Tampa, introduced a bill that if passed would allow telecommunications companies such as Verizon and BellSouth to bypass municipal and county governments and start offering cable television services to any area they see fit.

Whether the Florida Legislature will put out the fire or simply fan the flames with a proposed statewide cable-franchising bill, however, will be played out in coming weeks.

The telecom companies say passage of the law would be a victory for consumers, as traditional cable companies would be prone to losing what they call a monopolistic-like hold on communities when they tie up lucrative long-term franchises in incorporated areas.

Cable companies, however, believe it will be the customers who ultimately lose in such an aggressive move.

"This is part of a national effort by the telephone industry to circumvent the local franchising of cable television by gaining either statewide or national franchises ... so that they can build anywhere they want to on any schedule," said Steven Wilkerson, president of the Florida Cable Telecommunications Association that is representing companies like Bright House Networks and Comcast on the issue. "They want to try and avoid what the industry calls build-out requirements."

Build-out requirements are rules that dictate which areas a company must provide service, and they vary from community to community. They require cable companies to build everywhere in the community, and to not "cherry pick" which sections they'd like to serve based on a perceived greater return on investment.

Black ink territory
Verizon, in trying to establish its FiOS television service, has already struggled dealing with the dozens of different municipalities in the Tampa Bay area. In two years of negotiations with many of the 63 municipalities in the region, Verizon (NYSE: VZ) has secured only four, said Bob Elek, spokesman.

"There are too many avenues of delay in the current system," Elek said.

In Pinellas County, there are 24 different municipalities and that's a daunting task. "When you're looking at trying to size that market up competitively, you're obviously going to go where there is less opposition to having the service."

Critics of the statewide franchising agreement say choosing which areas to provide service and which to avoid will leave lower-income families out of competitive cable rates and new services and features, as telecoms will concentrate on more affluent neighborhoods.

"They want to be able to essentially redline areas that they want to offer services, contrary to public policy," said Timothy Lundgren, an attorney with the Grand Rapids, Mich.-based Varnum Riddering Schmidt & Howlett, which is representing local governments across the country fighting statewide franchising efforts. "Municipalities are certainly not willing to allow them to come in and serve the public in a discriminatory manner."

But many areas in Florida where Verizon is already installing fiber have median income levels between $24,000 and $40,000, Elek said.

"The bottom line is that there's no correlation between income and who purchases these services," Elek said. "At the end of the day, cable competitors like Verizon are going to go where the cable customers are." Breaking a contract?

The current language of Traviesa's House bill will allow cable companies to dump existing franchise agreements if a competitor like Verizon or BellSouth (NYSE: BLS) moves in and stirs up competition. If they do, customers could see an almost immediate difference, according to a February study by the San Francisco think tank Pacific Research Institute.

In the study, which telecoms are using to promote their views, average monthly cable rates could drop from $45.56 to $38.80 with telecom competition, according to figures presented by the Federal Communications Commission. Channel selections could increase from an average of 70.1 to 74.9, and the price per channel could decrease from 67 cents to 52 cents.

But it won't be that easy for cable companies to shed their franchise agreements that can be 10- to 15-year contracts, FCTA's Wilkerson said.

There are constitutional and contract law issues that need working out.

Even if the state passed a law allowing them to break the agreement, the local governments would immediately sue under impairment of contract. It's a very serious kind of lawsuit, he said. "Lawyers who advise me tell me that they (municipality) would likely win."

On a national stage
Last year, Texas, Virginia and Indiana were the first states to allow telecoms to have statewide franchises.

Any federal bill in the making could take a bit longer to pass.

U.S. Sen. Ted Stevens, R-Alaska, who serves as chair of the U.S. Senate Committee on Commerce, Science and Transportation, isn't expected to introduce a bill providing for telecom franchising release until late April or early May, said Aaron Saunders, a spokesman for the senator.

"I don't think municipalities or consumers have anything to fear from state-issued franchises," Elek said. "More states are going to be doing this kind of thing just to give their constituents a break through competition."