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Cable franchise fees lawsuit heard

Rooting for the cities, because this is a mess.

Lawyers representing 59 cities, including Austin, Houston, Dallas and San Antonio, on Wednesday asked an Austin district court judge to temporarily block a Texas law passed last year that cuts government fees for telecommunications and cable companies.

Senate Bill 1152, which took effect Sept. 1 and started to apply to payments starting Jan. 1, allows companies that offer both cable and phone services over the same lines to only pay the lesser of the two charges to local governments for using their rights-of-way. No physical change is required to add new uses of a line.

C. Robert Heath, one of the attorneys who represents the cities, said the law amounts to an unconstitutional gift of public resources to private corporations and said estimates show it would cost cities at least $100 million a year.

The cities argue that the Texas Constitution forbids cities, counties and other political subdivisions from giving away public money or things of value to private groups or individuals. The companies are not required to pass on savings to consumers because the state can’t regulate cable rates.

“It’s like ‘buy one, get one free,’” Heath said. “So we’re saying, ‘No, no, you can’t do that. You’re giving away the use of the right-of-way.’”

Houston Mayor Sylvester Turner had pushed legislators to oppose the measure and has said it cost the city about $17 million in annual revenue this year and has hurt its ability to offer services to residents.

“Given the fee would fluctuate with the number of cable customers, what is not changing is the significant impact this has had on our city budget,” Bill Kelly, Houston’s director of government relations, said Wednesday. “Anyone asking the cable companies why no one has lowered their bills?”

[…]

Assistant attorney general Drew Harris, who represents the state, argued that the reduced fee is not the same as a gift, making the analogy of toll roads that charge per car, not per passenger. Harris added that Texas law says the state owns rights-of-way, meaning the cost of using them is a matter for the Legislature to decide.

See here and here for the background. I must have missed the actual filing of the lawsuit, but never mind. We all know this will get to the Supreme Court eventually, and we know they love to rule in favor of businesses. The question is whether they’ll be overturning a lower court verdict or not. The judge has promised a quick ruling after the state files a response to a late plaintiffs’ motion, so we won’t have to wait too long to see where we start out.

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