To Discount or Not to Discount

This is a big week for Texas legislators regarding bills before the Business and Commerce Committee members. There is a lot of debate about extending discounts from the telecommunication companies.

In 1995, the legislature deregulated the telecommunication industry in the state of Texas. They created incentives in the legislation (HB 2128) that relaxed some of the rules for the telecommunication companies who voluntarily wanted to take advantage of the incentives. In exchange, the telecommunications companies had to provide services to schools, libraries, and hospitals at cost plus 5% or 10% profit. These discounts will end in January, 2012, if they are not extended during this legislative session.

The telecom companies claim not extending the tax cut would negatively impact their companies. This isn’t the case.

The law allows them to charge the cost of delivering the service to a school district plus a profit of 5% or 10%. They are allowed to build in the cost of the construction and spread it out over the life of a contract.

The telecom bill has been heard by the Senate but hasn’t been voted out of committee yet. There is a similar bill before the House that will be heard this week in committee.

It is important that we let legislators know that we want the telecom bill to be extended so that schools, libraries, hospitals, etc. will receive telecom services at discounted rates. If the the bills cut the discounts, budget cuts will negatively impact Texas public schools that much further. Time is of the essence and it is imperative that we let legislator’s constituents know how and what to say to Texas legislators to limit budget cuts related to Texas public schools.


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