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Senate committee hears testimony on bill clarifying franchise fees for streaming services
Summary
The committee heard competing testimony on whether the state should clarify that municipal franchise fees apply only to entities that physically occupy the public right‑of‑way and not to streaming providers and their customers.
Lede: The Senate Committee on Business & Commerce heard testimony on Senate Bill 9 24, a bill by Sen. Hancock intended to clarify that franchise fees charged by local governments for use of the public right‑of‑way apply to entities that occupy that right‑of‑way and do not extend to video streaming providers and their customers.
Nut graf: Proponents — including DISH and DIRECTV counsel and industry witnesses — said the bill simply restates existing policy so customers of streaming apps are not double‑charged. Opponents — including lawyers for municipalities and several city representatives — argued the bill would change established law, reduce local revenues used for right‑of‑way maintenance, and could be unconstitutional if it were interpreted as granting a public gift or exempting certain providers from fees previously applied based on service use.
Body: Sen. Hancock summarized the bill’s purpose as a clarification: franchise fees are charged to entities that occupy the public right‑of‑way for cable lines, and SB 9 24 would make explicit that streaming apps do not owe separate franchise fees for content streamed over those lines. Hancock said the change was meant to prevent customers from being charged multiple 5% fees on each streaming service they subscribe to.
Questions from committee members focused on the statutory history (Senate Bill 5 from 2005) and whether the approach mirrors negotiated compromises in prior sessions. Sen. King noted the prior negotiation in 2005 and asked whether this bill merely restates that deal; Hancock said it was intended to clarify the law in light of expanding app‑based streaming.
Public witnesses for proponents included: - Nicholas Herrenbach, representing the City of Dallas in opposition to the bill’s scope as originally filed; he described the history of franchise fee practice in Texas and cautioned that exempting certain services could be unconstitutional and would reduce right‑of‑way revenues used for street maintenance. - Kathleen Owen, attorney for DISH Network and DIRECTV, testified the bill would not change who pays franchise fees and is intended as a consumer protection measure to prevent cities from pursuing streaming providers and therefore charging customers multiple 5% fees. - Steve Wallins (representing 31 Texas cities in litigation) testified against the bill as drafted, calling it an effective change of law that would exempt streaming companies and questioned the policy rationale for exempting large out‑of‑state companies. - Snapper Carr (Texas Municipal League/Texas Coalition of Cities) argued the bill’s draft language could be broad enough to create an exemption for the entire set of Internet services and warned of constitutional and federal‑law conflicts.
Several witnesses noted pending litigation (district court and Court of Appeals) involving municipal franchise claims against streaming companies; members asked whether the statutes and cases should be allowed to play out in court before legislative intervention.
Ending: Chair closed public testimony and left SB 9 24 pending for further consideration. The committee did not take a final vote on the bill during this hearing.
