Nothing in the legislation requires cable and phone companies to pass along any savings to consumers.
It could cost the City of San Antonio $7.3 million. For Dallas it means $9.3 million. For Houston it could amount to a whopping $24 million.
These are the potential impacts of Senate Bill 1152, legislation recently adopted in Austin that would limit the ability of cities to collect reasonable right–of-way rental fees from cable and telecom companies. The Texas Legislature gave its final go ahead on May 21 and the governor on June 14 signed SB 1152 into law.
“They’re essentially, in just San Antonio’s case, taking a straw and sucking out $8 million,” said San Antonio City Councilman Rey Saldaña, quoted in a recent edition of the San Antonio Express-News. Saldaña said the city could better spend money fixing sidewalks or on a homestead tax exemption.
Companies that deliver both cable and telephone services typically pay cities both cable franchise fees and right-of-way access-line fees in exchange for the use of city right-of-way. Under the SB 1152, such companies will pay the greater of the two charges measured on a statewide basis, but not both.
Opponents like Saldaña had noted that telecom companies pay rent for the use of right of way, not taxes, and opponents also defended the charges as fair because phone and cable companies profit by using the city’s right of way. They noted that nothing in SB 1152 requires cable and phone companies to pass along any savings from it to consumers.
“These residents who are paying … are not going to be able to call up their cable company and say, ‘Hey, I don’t think I should have to pay for both my cable and phone bill’,” said Saldaña.
The overall loss to cities measured on a statewide basis would has been calculated at $125 million each year. Of that, Dallas could lose $9.3 million, San Antonio $7.3 million, Austin $6.3 million, Arlington $2.8 million and Denton $669,548, according to reports.
Houston, meanwhile, would lose up to $24 million. Mayor Sylvester Turner predicted the city could start laying off workers as a result.