Gov. Arnold Schwarzenegger signed legislation Friday that could speed the telephone industry's metamorphosis from provider of Sunday phones calls to Grandma to a home-entertainment service channeling "Desperate Housewives."

Promising more competition and lower prices, the telecommunications industry starting Jan. 1 will no longer be forced to enter into city-by-city franchise agreements.

"Increased competition will translate into better service and lower prices for everyone," Schwarzenegger said in a signing message. "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."

Telecommunications giants Verizon and AT&T, primarily, claim the drawn-out and costly process of securing permission from cities and counties stifled expansion with burdensome regulations. A statewide template will replace local franchise agreements.

Unshackled, industry officials say they can aggressively market television programming brought into living rooms through high-speed phone lines. The best prices, industry officials acknowledge, will be offered to consumers who also subscribe to phone and Internet service, a practice known as bundling.

However, cities and counties have protested, wary that the new rules could lead to reduced revenues from franchise fees, the loss of public access channels, and limits on local governments' ability to control facilities that are placed on public property.

Some consumer advocates contend the industry will skip lower-income neighborhoods, ignore poor-service complaints and eventually raise prices.

"The Legislature and governor took power from cities and from consumers to give to the AT&Ts, the Verizons, and the Time Warners," said Jamie Court of the Foundation for Taxpayer and Consumer Rights.

But others, including some lawmakers with consumer-protection credentials, say the measure will deliver what's promised and ignite new investment in telecommunications.

"This bill will significantly change the lives of many Californians. Not just because it will bring new options to the cable TV market, but because it will bring lower-cost ultrahigh-speed Internet access to communities across the state, " said Assemblyman Lloyd Levine, a Sherman Oaks Democrat who helped craft Assembly Bill 2987.

Phone giants, under increasing profit pressures and under threat of losing long-distance market share to new Internet-based technology, are eager to expand into in-home video service. They sought - and secured - from the Legislature a statewide template for franchises that guarantees quick access to markets. In return, providers will have to continue to pay franchise fees, offer some government access channels and bring service to some low-wealth communities, among other concessions.

Comcast, Cox and other entrenched companies will be awarded benefits if a telecommunications firm invades a market already served by cable. The new easier access rules also will apply to cable companies that do not have franchise contracts or when contracts expire.

"Under this law, California sets a new standard for accelerating cable-TV competition and customers can expect new choices, greater value and improved service, " said Tim McCallion, president of Verizon's west region.

Megan Taylor, a spokeswoman for the League of California Cities, which had stridently opposed the measure, said, "We are going to work hard to make sure the implementation process goes smoothly and Californians have access to the 21st century telecommunications services that they need and deserve."

The Pacific Research Institute, a free-market advocate, called local franchises a throwback to a time when cable companies enjoyed monopolies.

"They're not needed anymore. These guys are going to be scrambling for every customer, said Sonia Arrison, its director of technology studies. "There's much more power in the hands of the consumers today. That's the power of the wallet."