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Telcos getting into video services vehemently denied that they are "redlining" low-income areas as they build out broadband.

Speaking at USTA's IP Video Conference, Dorothy Atwood, senior vice president of regulatory planning and policy at SBC, said the debate over redlining is a competitive tactic, not a social issue.

"This is extremely distorted by the cable industry," Atwood said. "Redlining is a red herring. SBC intends to provide video over the next five years to all broadband customers."

"It's not our plan to look at only high-end communities," said Verizon's Mary Jo Howe, vice president of video and wholesale compliance in a Tuesday panel about the regulatory landscape. "We're looking to provide service to everybody, it will just take time to get there."

Howe also noted that even though Verizon is placing video, voice and data services on one network, customers still will have the ability to buy only one service.

The telcos say regulations, particularly franchise agreements, will slow their entry into video services. Currently, service providers must apply to each municipality to get permission to offer video services, a process they say is difficult and time-consuming.

"We want to offer video service in 14 states," Howe said. "While it's not difficult to get one franchise agreement in one city, we're looking at thousands of places and some of those agreements take 18 months to complete," she said.

In New Jersey alone, Verizon counted 526 franchises that it will need to negotiate individually to offer services. Municipalities such as Chicago, however, are resistant to the idea of a state-based or national franchising agreement. In particular, municipalities are concerned that a national franchising situation would ignore the specific concerns of individual cities.

"One of the major issues for us is access, making sure that everyone, no matter the social or economic community, has the ability to communicate," said Norma I. Reyes, commissioner of the department of consumer services for the City of Chicago. Translation: No redlining.