Texas Business Report: Cable Companies v. Satellite Providers

Could new legislation make cable more appealing than satellite television?
Fri April 5, 2013 7:30 pm

Cable Hook-Up

Texas cable TV customers may get a  break on their monthly bills  thanks to a proposed measure working its way through the state legislature. An attempt to level the playing field between cable companies and rival satellite providers, HB 1900 would exempt subscribers from paying the 6.25 percent state sales tax on the first $75 of their bills, the  Austin Business Journal  reports. 

In addition to the state sales tax, cable customers pay another 8.25 percent tax to cover local taxes and franchise fees (a total of 14.5 percent)—while satellite customers only have to pay the 6.25 percent sales tax.

The Bottom Line: Naturally, the Texas Cable Association is backing the proposed bill, hailing it as “the biggest consumer tax cut proposal of the 83rd session,” according to the ABJ. Satellite providers beg to differ, arguing that the local cable fees—which pay for installing cable lines in public easements—“should be treated as a  cost of doing business , much like the costs satellite companies incur from maintaining satellites in space,” the Texas Tribune reports.

Plant Down Under

Exxon Mobil released details this week about its plan to build the world’s largest floating liquefied natural gas plant off the coast of Australia. Stretching more than 500 yards in length, the processing and export facility would “bump up Australia's current LNG production by nearly 30 percent,” Reuters reports. Irving-based Exxon would build and operate the plant in a fifty-fifty partnership with BHP Billiton.

Floating LNG production, which Reuters describes as an “as yet untried technology,” could help offset the costs of other forms of gas development. Exxon and BHP estimate the plant could begin operations by 2020.

The Bottom Line : If the project goes through as planned, it would boost Australia’s already strong position in the liquid natural gas market. The country is on pace to become the world’s top LNG exporter by 2020, according to Reuters. However, “the country has been plagued by cost inflation” in recent years, prompting Fitch Ratings to forecast slowed growth in a report published Tuesday.

Ready, Aim, Hire

State representative Larry Gonzales (R-Round Rock) has reached out to more than two dozen gun manufacturers in hopes of persuading them to relocate to his Williamson County district, which includes Round Rock, Hutto, and Taylor, the Austin Business Journal reported this week. In a letter to the companies , Gonzales referred to Texas as “a pro-gun, pro-2nd amendment, pro-business, right to work state” with an “economic infrastructure which allows business to thrive.”

Gonzales declined to name the companies he contacted but said Governor Rick Perry had also pitched them on making the move to Texas.

The Bottom Line : The Republican lawmaker listed several factors that he believes would make Williamson County a desirable location for gun makers, primarily its access to major highways and growing manufacturing sector. According to the ABJ, none of the companies have responded to Gonzales’ invitation thus far. 

Winner of the Week: Energy Future Holdings

Energy Future Holdings Corp. will not be required to pay taxes on $23 billion of assets it plans to sell, the IRS announced this week. Dragged to the brink of bankruptcy by plummeting natural gas prices, the beleaguered Dallas-based corporation is scrambling to dump shares in its subsidiaries in an effort to lower its tax burden when it restructures within a year, Bloomberg reports. EFH sought the IRS’ ruling to ensure that proceeds from the internal transactions would not be “triggered into taxable income,” according to a Securities and Exchange Commission report.

Loser of the Week: Trinity Forest Golf Course

Don Williams, former CEO of Trammell Crow Co., has some harsh words for a planned 400-acre golf course in South Dallas that will be partially funded with city money, according to the Dallas Business Journal. Speaking at a function for real estate developers at the Dallas Country Club, Williams referred to the Trinity Forest Golf Course as “the worst use of $12 million that the city could possibly spend,” adding: “The last thing we need is another high-end golf course.”

The retired developer is an outspoken advocate for creating jobs and sparking economic growth in the city’s southern half. While the golf course — a public-private partnership between the city, AT&T and Southern Methodist University — is expected to pump more than $30 million into the local economy, Williams said he does not think the project is the best way to revitalize the area or address the city’s income disparity, the DBJ reports.

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