government relations services protecting the public interest in washington, dc presented by: tony...

Government Relations Services

Protecting the Public Interest in Washington, DC

Presented by:

Tony PerezNATOA

Gerard Lavery LedererBest Best & Krieger, LLP


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?


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


Update of the 96 Act

•What issues does local government need to address/ be concerned about?


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?


E-RateThe 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.

http://www.fcc.gov/document/focused-comment-sought-e-rate-modernization


FCC HAS COMMENCED NEW RULEMAKING ON WIRELESS


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:

1. 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?


Rulemaking Structure (cont’d) 2. Should FCC exempt temporary antenna structures

from federal review? 3. Should FCC adopt rules re: Section 6409? What

rules?4. 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.


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?


2013 CAP ACT / S.1789

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

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

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

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

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.


TAXES

WHAT IS TAXABLEN.B. This is not only a federal

issue!


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.


CAVEATS/GIVENS• 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.

18


CAN CONGRESS HARMONIZE ELECTRONIC TAXATION?

Possible On-Line Tax Reform

Marketplace Fairness

Internet Tax Freedom

Digital Goods

Cell Tax Morat’m


The Permanent Internet Tax Freedom Act (S 31/HR 434) or (S. 1431)

Internet Tax Freedom Forever Act (“ITFFA”) 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

20


Wireless Tax Fairness Act H.R. 2309, S.1235

• 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

21


The Digital Goods and Services Tax Fairness Act of 2013 -- S.1364

• 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

22


Marketplace Fairness Act (S. 743 and H.R. 684)

• 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

23


DON’T FORGET THE THREAT AT THE STATE LEVEL:

State Communications Tax Reform


Communications Tax “Reform”

• 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

25


Communications Tax “Reform” (cont’d)

• 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

26


Name of Bill/Why it’s Important to Local Government

Bill Number/ Status/ Last Congressional Action Issues Update as of 3/19/14

STELA REAUTHORIZATION Not a huge issue for local governments, but tracking to ensure it does not become a vehicle for an anti-local government initiative

Awaiting Introduction Sen. Rockefeller & Thune letter asks stakeholders for input House begins plans for clean mark up before end of first quarter

While no bill has yet been introduced, I have added to the list as this is the lone “must pass” piece of communications legislation in this Congress.

Rep. Greg Walden wants a discussion draft to be circulated by March 2014.

MARKETPLACE FAIRNESS ACTProvides local government authority to impose existing sales and use taxes on local purchases made on-line from a remote seller-Value is estimated at over $23B a year

S 743 and H.R. 684 Passed Senate and awaiting House Action. House GOP staff meeting in early Feb was not very positive about bill moving – but has yet to determine how to deal with ITFA.

S 743: 6/14/2013- Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law H.R. 684: 4/8/2013-Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law. House Hearing set for 1st week of March

Question is -- what impact possible departure of Finance Chairman Baucus and elevation of Sen. Wyden (D-Or) might have on legislation. Also, unknown whether House Judiciary will turn its attention to Immigration Reform as has been recently reported.

S 743: 22 Democratic Cosponsors 6 Republican Cosponsors 1 Independent Cosponsor H.R. 684: 42 Democratic Cosponsors 24 Republican Cosponsors

SCORE CARD


SCORE CARDCAP ACT

Provides fixed number of channels and financial support for PEG operations despite state laws and eliminates limitation of PEG support used only for capital needs.

S. 1789 12/10/2013- Referred to the Committee on Commerce, Science, and Transportation. Markey co-sponsorReferred to Senate Commerce.

S. 1789: 1 Democratic Cosponsor

The Permanent Internet Tax Freedom Act Would forever ban state and local taxing internet access – and could potential grow as more services are considered access.

S 31/H.R. 434 Current bans

expires in 11/ 2014.

No actions to date

S 31: 1/22/2013- Referred to the Committee on Finance. H.R. 434 2/28/2013-Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law


S 31: 1 Republican Cosponsor

H.R. 434: No change


SCORE CARDInternet Tax Freedom Forever Act (ITFFA) Would forever ban state and local taxing internet access – and could potential grow as more services are considered access

S. 1431 Current bans

expires in 11/ 2014.

No actions to date.

8/1/2013-Referred to the Committee on Finance.


S 1431: 22 Republican Cosponsors, 11 Democratic Cosponsors

Wireless Tax Fairness Act Would impose a five year moratorium on new or discriminatory state and local wireless taxes.

H.R. 2309 No actions to

date.

7/15/2013-Referred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law

H.R. 2309: 139 Republican Cosponsors 80 Democratic Cosponsors


SCORE CARDDigital Goods and Services Tax Fairness Act of 2013 Would create certain carve outs from taxation of on-line services – This bill is almost the opposite of the Marketplace Fairness Act.

S. 1364

No actions to date.

7/25/2013-Referred to the Committee on Finance.


S 1364: 3 Republican Cosponsors 1 Democratic Cosponsor

Prohibiting In-Flight Voice Communications on Mobile Wireless Devices Act of 2013 Would allow for issuance of regulations prohibiting individuals [on-duty crew and federal law enforcement acting in official capacity exempt] on aircrafts from engaging in voice communications using a mobile device during flight.

H.R. 3676 12/10/2013-Referred to the Subcommittee on Aviation. 2/11/2014-Ordered to be reported by Voice Vote. Was cleared by voice vote.

H.R. 3676: 18 Republican Cosponsors 13 Democratic Cosponsors


SCORE CARD

Unlocking Consumer Choice and Wireless Competition Act Repeals a Library of Congress (LOC) rulemaking determination regarding the circumvention of technological measures controlling access to copyrighted software on wireless telephone handsets for the purpose of connecting to different wireless telecommunications networks.

H.R. 1123 Legislation was passed on 2/25/14 House consent calendar despite opposition of leading Democrats. (House GOP had a FOP letter of support on opposing bulk unlocking.) 2/26/14-Received in the Senate and read twice and referred to the Committee on the Judiciary.

H.R. 1123: 7 Democratic Cosponsors 3 Republican Cosponsors


Notable Filing DeadlinesDue Date Proceeding

March 28 Facilitating the Deployment of Text-to-911 and other Next Generation 911 Applications

April 7, 2014 E-Rate Comments Due

April 21, 2014 E-Rate Reply Comments Due

April 21, 2014 Replies due in Annual Assessment of the Status of Competition in the Market for Video Programming

April 28 Facilitating the Deployment of Text-to-911 and other Next Generation 911 Applications

30 Days after Fed Reg. Publication

Multilingual EAS Comments Due

45 Days after Fed. Reg. Publication

Multilingual EAS Reply Comments Due


Questions

• Email Tony or Gerry for a copy of the presentation.


Contact Information

Tony PerezPresidentNATOA

DirectorSeattle Office of Cable Communications206 [email protected]

mailto:[email protected]


Gerard Lavery [email protected] Best Best & Krieger 2000 Pennsylvania Avenue N.W.Suite 4300 Washington DC 20006 Phone: (202) 785-0600 Fax: (202) 785-1234 Cell: (202) 664-4621Website: www.bbklaw.com

Contact Information

PHOTO

mailto:[email protected]

http://www.bbklaw.com/

government relations services protecting the public interest in washington, dc presented by: tony...

Documents