According to Assembly Speaker Fabian Nunez, who pushed for the bill, the legislation aims to do away with local cable franchises by easing rules that would allow phone companies to compete with cable carriers.
"California has led the way in the evolution of new technology, and with this bill, our state's policy toward contemporary TV and entertainment technology is catching up to the times," Nunez said.
The bill, which now goes to Gov. Schwarzenegger for his signature, passed the state’s Assembly by a 64-5 vote.
According to telecom industry analysts, the bill could prove to be a boon for consumers eager to take advantage of bundled Internet, phone and TV packages because it would force companies to drop prices and offer a wider range of content.
Telecom companies such as Verizon and AT&T have lobbied federal lawmakers in Washington to eliminate laws requiring franchise deals with municipalities to provide cable services.
Verizon already offers TV service in six California cities.
AT&T said it would invest up to $ 1 billion in California to upgrade its telephone network and launch an Internet-protocol video entertainment service to compete with cable operators.
Meanwhile, lawmakers in Texas have already eased cable licensing restrictions, opening the door to telecom companies eager to enter the TV market.
According to analysts, laws are likely to change on a state-by-state basis, with California and Texas leading the way, if federal lawmakers don’t act quickly to reform cable regulations.