Analysis: Why cable companies and Texas cities are duking it out at the Capitol

BY Ross Ramsey

There’s yet another front in the war between your city and state government, and it’s cable TV.

It’s not on TV. It’s about TV — specifically, about where cable companies hang or bury their lines, and whether they should keep paying rent to cities for that space.

In many ways, it’s an ordinary fight. The companies are trying to get rid of a multi-million-dollar charge that started back in the days when they had to win permission from city governments to provide their services, and when cable and phone services weren’t bundled together.

It’s a fair amount of money at stake, too. According to the fiscal note — that’s the analysis of what House Bill 3535 and Senate Bill 1152, which are identical, would cost — the state’s big cities could take significant hits to their budgets: Houston would lose up to $27.5 million; Dallas, $9.2 million; San Antonio, $7.9 million; Austin, $6.3 million; Arlington, $2.8 million; Sugar Land, $1.2 million; Plano, $734,017; Denton, $669,548; Waco, $373,194; and The Colony, $235,000.

It makes no difference to the state budget, or to county governments. But the debate comes at a time when the state and the cities are wrestling over a list of topics, from local laws that require companies to provide paid sick leave, to religious exemption laws, to requiring voter approval when local governments raise property tax revenues more than a set amount.

Two years ago, cities fought off those property tax limits, but the Texas Senate recently approved a 3.5% trigger for property tax increase elections, and the last House version to surface had a 2.5% trigger. The local governments have argued that the state’s proposed limits would quickly cut into services local voters want, and their opposition has helped slow consideration of that key part of state leader’s public education/property tax package.

State law allows cities to charge telecommunications providers for the right of way used to string together their networks. But it also lets the cities charge twice when a provider carries telephone and cable TV services over the same line. The legislation would allow the cities to charge companies the bigger of the bills, but not both.

The cities are grumbling, as you might expect. The Senate approved the legislation 26-5 early this month. In the House, it was approved in committee and awaits a spot on the agenda of the full House.

The policy argument isn’t all that complicated. The Texas Cable Association, like the authors of the bill, argued that there’s no reason to continue charging two fees because “the impact to the city doesn’t change” when a company sends two services over the same line.

One of the arguments against cutting out the cable fees is that doing so would force cities to replace the lost money with property taxes. The cities see this as yet another attack from the state government, a financial raid on their fees that doesn’t even require the cable companies to pass any savings along to customers. The fees are for commercial rental of public parties, they argue, and some cities — a lobbyist for the city of Corpus Christi made this argument — use the money to keep local access channels running on cable.

So far, that hasn’t been a winning argument. The locals are doing better with their property tax fight than with their cable fight.

It’s not a fight most regular Texans care about or will benefit from, unless the cable companies develop a sudden itch to pass along the savings. It’s like other battles that are often more about commerce than about customers, where companies regulated by cities appeal to the state government for relief, whether the regulations are about plastic shopping bags, rideshares, cable television, sick leave, rental scooters or short-term housing.

With the property tax fight at the front of the issue list, local officials feel their ability to pay for services their voters want is at risk. State lawmakers, on the other hand, are trying to put a leash on local property taxes — taxes the state itself doesn’t levy.

Other legislation moving through the Legislature would take away cities’ ability to argue about any of it at the Capitol, by outlawing the use of local tax dollars to pay lobbyists to communicate their point of view in Austin.

The state government, supposedly a civic partner of local government, has made cities and counties a regular foil.

Cable bills are just the latest argument. It’s a war.

Disclosure: The Texas Cable Association has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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