Presentation Transcript

1. Protecting the Public Interest in Washington, DC Presented by: Tony Perez NATOA Gerard Lavery Lederer Best Best & Krieger, LLP
2. AT&T Trials (IP Transition) Company has asked for permission to shift to all IP services Commission has granted permission in two locations West Delray Beach, Florida (Kings Point) and Carbon Hill, Alabama Why does local government need to be concerned?
3. Open Internet Order Verizon v. FCC. FCC is not going to appeal Verizon Notice of Proposed Rulemaking will be issued to explore authority under Section 706 options, including state barrier issue. Title II Stays Alive Municipal Broadband 706 Authority
4. Update of the 96 Act What issues does local government need to address/ be concerned about?
5. Comcast-Time Warner Merger Franchise Authority Review Rights Is successor financially, technologically and legally capable of honoring your franchise? Are their non-compliance issues to be addressed with incumbent? Can you review? Will State review? What are the other opportunities to make your voice heard?
6. E-Rate The Federal Communication Commission’s Wireline Competition Bureau (WCB) released a second public notice seeking focused comment on three issues raised in the E-rate Modernization Notice of Proposed Rulemaking. Comments in the proceeding are due April 7, and reply comments are due by April 21 to address: (1) How best to focus E-rate funds on high-capacity broadband, especially high-speed Wi-Fi and internal connections; (2) Whether and how the Commission should begin to phase down or phase out support for traditional voice services in order to focus more funding on broadband; and (3) Whether there are demonstration projects or experiments that the Commission should authorize as part of the E-rate program that would help the Commission test new, innovative ways to maximize cost-effective purchasing in the E-rate program.
7. FCC Has Commenced New Rulemaking on Wireless
8. Rulemaking Structure In re Acceleration of Broadband Deployment by Improving Wireless Facilities Siting Policies, WT Docket No. 13-238, FCC 13-122 (9/26/2013). Four areas addressed: Should FCC expedite National Environmental Policy Act and National Historical Preservation review processes for DAS and small cells, and categorically exclude these deployments from review?
9. Rulemaking Structure (cont’d) Should FCC exempt temporary antenna structures from federal review? Should FCC adopt rules re: Section 6409? What rules? Should FCC alter its shot clock rules, to, e.g. determine when an application is complete and address remedies if shot clock not met; address DAS; address moratoria, muni siting preferences.
10. FCC Questions re Implementation of Sec. 6409 What does “shall not deny and shall approve” mean? Are there any special circumstances where an application may be denied? Does it require approval where a structure violates safety codes, or otherwise places persons and property at risk? Can it be read to allow imposition of conditions?
11. PROBLEM Cable Act Unnecessary Limits on the Use of PEG funds. SOLUTION Bill amends the Act to ensure that PEG fees can be used for any PEG purpose, i.e. money can be spent for operating as well as capital. 2013 CAP ACT / S.1789
12. PROBLEM(s) Discriminatory Treatment of PEG channels SOLUTIONS Bill amends the Act to ensure PEG programming is transmitted without “material degradation and without altering or removing content or data” and such signals shall be viewable “by, every subscriber of the cable system without additional service or equipment charges…” No fee for connection. 2013 CAP ACT / S.1789
13. PROBLEM Loss of PEG Support and Localism SOLUTION Cable operator must provide greater of: 2% of gross revenues; Historical support received (i.e. prior to the state franchise) or State franchise financial obligations. 2013 CAP ACT / S.1789
14. Problem Loss Of PEG Channels Solution Cable Operator must provide number of channels in place day before state law was passed. If none on that day, then up to 3 channels at request of locals. 2013 CAP ACT / S. 1789
15. PROBLEM Operators claiming they are video providers, not cable and therefore not subject to PEG obligations SOLUTION Act is amended to ensure providers using wired facilities in the rights of way are treated similarly and are subject to similar PEG requirements. 2013 CAP ACT / S.1789

16. TAXES

    WHAT IS TAXABLE N.B. This is not only a federal issue!
17. Tax “Reform” Tax Exempt Bonds Chairman Camp’s proposal would impose a 10 percent surtax on interest income from otherwise tax-exempt municipal bonds and applies to interest earned on both new issues and outstanding bonds. This would result in increased costs for local governments and special districts to borrow and raise the cost of infrastructure investment by capping the tax exemption for municipal bond and eliminating private activity bonds.  In addition to the municipal bonds, . State and Local Tax Deductibility  Chairman Camp’s proposal would eliminate the deduction for personal state and local income, property and sales taxes.  Such a proposal would rollback taxpayer protections against double-taxation by eliminating the federal deduction for local government tax payments.
18. Communications tax “reform” at the federal or state level is a very dangerous game for local governments who have the most to lose, the least to gain. Local governments’ future ability to tax or impose fees on any type of communications service provider is at serious risk. Tim Lay Rule: “Beware if it has ‘fairness’ in the title of the bill!” Communications tax reform may be inevitable in 2014 at the Federal level. Don’t lose at the state level before then. Reform need not be bad for local governments. Locals must be far more active participants if interests are to be protected. CAVEATS/GIVENS 18
19. CAN CONGRESS HARMONIZE ELECTRONIC TAXATION? Cell Tax Morat’m Digital Goods
20. ITFA has been in effect since 1998, currently scheduled to expire in November, 2014 ITFA “walls off” from state and local taxation the largest, and fastest growing, form of communications — broadband ITFA must be repealed or allowed to expire as a condition of reform or this is simply an industry tax reduction exercise, not true tax reform Left in place, the ITFA will eventually “tax exempt” all, or almost all, of the entire telecommunications industry’s services The Permanent Internet Tax Freedom Act (S 31/HR 434) or (S. 1431) Internet Tax Freedom Forever Act (“ITFFA”) 20
21. Last Congress (HR-1002) passed the House, went nowhere in the Senate Would impose a 5-year moratorium on any new “discriminatory”, or any increase in existing, state or local taxes on wireless services; would grandfather existing taxes and exclude taxes imposed by vote of community Wireless Tax Fairness Act H.R. 2309, S.1235 21
22. Legislation creates a nationwide “tax preference” for online goods and services over competing brick-and-mortar sales by limiting state and local taxes on “digital goods and services.” Downloaded music and videos; Pay-per-View (PPV) and video-on-demand (VoD) revenue from the cable franchise fee revenue base The Digital Goods and Services Tax Fairness Act of 2013 -- S.1364 22
23. Passed Senate on a strong bi-partisan basis Allows states and local governments to collect sales and use taxes on remote (typically online) sales to their residents Aims to eliminate the current disadvantage suffered by brick-and-mortar retailers vis-à-vis online retailers Generate funds Marketplace Fairness Act (S. 743 and H.R. 684)  23

24. DON’T FORGET THE THREAT AT THE STATE LEVEL:State Communications Tax Reform

25. Basic approach Collapse all communications-related taxes and fees (cable franchise fees, perhaps PEG fees, DBS, landline telecom & wireless) into a single tax Move responsibility for imposition, collection and auditing of the tax to the state level Examples include VA, FL, KY, OH, and NC DOWNSIDE: Eliminate communications-related ROW fees Communications Tax “Reform” 25
26. Benefits for industry: Lower tax administration costs Lower taxes, except perhaps for DBS Greater protection against future tax increases Risks to local governments: Loss of ability to control local tax structure and policy, and thus control over local budget revenues Loss of auditing authority to ensure correct amounts are paid Communications Tax “Reform” (cont’d) 26
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32. Notable Filing Deadlines
33. Questions Email Tony or Gerry for a copy of the presentation.
34. Contact Information Tony Perez President NATOA Director Seattle Office of Cable Communications 206 386-0070 Tony.Perez@Seattle.gov
35. Contact Information Gerard Lavery Lederer Gerard.Lederer@bbklaw.com Best Best & Krieger 2000 Pennsylvania Avenue N.W. Suite 4300 Washington DC 20006 Phone: (202) 785-0600 Fax: (202) 785-1234 Cell: (202) 664-4621 Website: www.bbklaw.com PHOTO