Pending legislation that could undermine the ability of cities to collect reasonable right-of-way rental fees from cable and telecom companies have raised alarm bells with officials with several major Texas cities.
The bills, SB 1152 by Sen. Kelly Hancock and HB 3535 by Rep. Dade Phelan, have drawn fire from Houston Mayor Sylvester Turner, who said the city’s deficit would spike up to $27 million as a result. It also has drawn opposition from officials from the cities of Dallas, San Antonio and elsewhere.
Under current law, companies that deliver both cable and telephone services pay cable franchise fees and right-of-way access line fees in exchange for the use of city right-of-way. Under the proposed legislation, such companies would pay the greater of the two charges measured on a state-wide basis, but not both.
Opponents of the legislation note that the companies pay rent for the use of right of way, not taxes, and defend the charges because phone and cable companies profit by using the city’s right of way. Opponents further note that nothing would require cable and phone companies to pass along to consumers any savings accrued from the legislation.
“There (also) are concerns that the (legislation) will … give the large joint telecom and cable companies a competitive advantage against the small telecom companies,” said San Antonio’s assistant finance director Russell Huff in recent testimony at the Capitol.
According to estimates published in the Houston Chronicle, the City of Dallas would lose about $9.4 million in revenue under the legislation, while San Antonio would lose $8 million. Houston, meanwhile, would lose from $17 million to $27 million, according to estimates in the newspaper. Mayor Turner told the newspaper that such losses would result in layoffs.
“My ask is that they will look at the impact that this bill will have on the city as a whole, on their customers, on their business operations, and on fire and police and municipal workers,” Turner told the newspaper.
The Texas Coalition of Cities for Utility issues also has expressed opposition to SB 1152 and HB 3535.