Texas Legislature Passes Broadband, Privacy Bills

Texas legislators passed broadband funding and consumer privacy bills before adjourning Monday. Gov. Gregg Abbott (R) has until June 18 to consider many of the bills. "This was a big, important session for rural telecom,” said Texas Telephone Association (TTA) Executive Director Mark Seale in an interview Tuesday.

The state legislature passed a proposed constitutional amendment to set up a state fund for broadband infrastructure after House and Senate members agreed Sunday to conference reports on HJR-125 and companion bill HB-9. Legislators also agreed to an appropriations bill providing $1.5 billion for the broadband fund over two years. As part of the proposed Texas Broadband Infrastructure Fund, legislators tagged $155.2 million for next-generation 911 and $75 million for pole replacements for fiscal-year 2024. HJR-125 doesn’t require Abbott’s signature and will go before voters Nov. 7.

TTA applauded legislators for supporting the broadband fund and multiple other telecom measures. They included SB-1238 to update broadband grant rules with a fiber preference; SB-1425 to extend USF support for small telcos by 10 years; SB-1710 to establish a competition test allowing for Texas Public Utility Commission of whether previously rural areas should continue receiving support; and HB-1597 to streamline tariff filing requirements. Rural telcos that faced a USF funding crisis a few years ago (see 2305110032) “are in a much better place because of the certainty of regulations going forward,” Seale said. Also, the proposed review of trending-urban areas’ continuing need for USF support will decrease burden on USF contributors, he said.

The legislature didn’t overhaul USF contributions, said Seale. The House-passed version of HJR-125 and HB-9 included $5 billion for the broadband fund over 10 years, including support for state USF. But the Senate disagreed and the conference went with $1.5 billion over two years with no USF funding, said the TTA official. That means Texas will keep the status quo of using a revenue-based USF surcharge, which the PUC recently halved to 12% (see 2305110032). Legislators also removed a proposal from an earlier version of SB-1710 that would have required VoIP providers to pay into USF, said Seale.

The PUC may take up USF contribution reform later, said Seale. But with the bills’ passage and litigation between rural telcos and the PUC finished (see 2208100043), the TTA official hopes “we can take a breather on USF for a little while.”

The Texas Cable Association looks forward to Abbott signing HJR-125 and HB-9, said President Walt Baum: The group “applauds the House and Senate for this historic investment in expanding reliable, high-speed broadband connectivity in our state.” AT&T applauds the legislature "for making such a strong commitment and investment in broadband," a spokesperson said.

Privacy Bill Passed

Texas could soon become the 10th state with a comprehensive privacy bill. The House voted 144-0 Sunday and the Senate 31-0 to adopt a conference committee accord on HB-4, another comprehensive privacy bill in the mold of Virginia and Connecticut laws. The legislature also passed a children’s privacy bill (HB-18) that would require websites to register user ages, collect parental consent and make rules for ads targeting kids. And lawmakers passed SB-2105 to register and regulate data brokers.

HB-4 would allow global opt-out signals and require opt-in consent for certain sensitive data. It would hold companies to data protection and minimization standards, prohibit dark patterns and regulate pseudonymous and biometric data, assessing $7,500 per violation, enforced solely by the Texas attorney general. The law would mostly take effect July 1, 2024, though requirements to accept global opt-outs wouldn’t take effect until a year later.

The House and Senate earlier passed the bill but disagreed on details (see 2305100064). “When the House sent HB 4 to the Senate, it was already the strongest data privacy bill in the country,” said sponsor Rep. Giovanni Capriglione (R) in a news release. “The bill is now even stronger and will provide greater protections to Texas consumers. We hope other States turn to Texas as a model to maximize the utility of rights provided to consumers and minimize compliance costs for businesses.”

Abbott should sign HB-4, said Computer & Communications Industry Association State Policy Director Khara Boender. As states consider ways to protect privacy, “we commend Texas policymakers for passing balanced and meaningful protections for consumers that continue to allow innovation to thrive.”

What’s unique about the Texas bill is its applicability standard, Husch Blackwell privacy attorney David Stauss blogged Sunday. Other Virginia variants set thresholds based on number of consumers and gross revenue percentage, but the Texas bill would apply to entities that do business in Texas, sell or process personal data and aren’t small businesses as defined by the U.S. Small Business Administration. Also, sale is defined in Texas bill’s similarly to the California Consumer Privacy Act, noted Stauss.

Texas would join many other states banning TikTok on government devices if Abbott signs SB-1893. The House voted 139-2 Saturday after the Senate voted unanimously Friday to support a conference committee report. Meanwhile, Abbott signed a bill (SB-1602) Monday to clarify enforcement of the state’s litigated social media censorship law (see 2303310029).

"State-implemented bans on government devices and networks will prevent state agencies -- including colleges and universities, and economic development and tourism agencies -- from reaching a wider audience,” a TikTok spokesperson said Tuesday. “The best way to address state and federal concerns about national security is with the transparent, U.S.-based protection of U.S. user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing.”

Legislators adjourned without passing a video bill (SB-1117) to clarify that streaming and satellite TV providers aren’t required to pay local fees. Cities had raised concerns the bill could lead to eliminating all cable franchise fees in Texas (see 2305190048).