News

Calif. Ops Push DBS Tax

3/20/2003 9:32 AM Eastern

California's cable lobbyists are busy these days, trying to avoid taxes on
their constituents while drawing regulators' attention toward the
competition.

The California Cable Telecommunications Association has resurrected a
proposal from last session designed to tax direct-broadcast satellite services
at a level that's closer to the levies paid by cable companies, if not on par
with them.

Gaining passage of a DBS tax is the association's top priority this session,
lobbyists said.

The industry noted that the state's operators pay the highest taxes in the
nation, including utility and possessory-interest taxes, plus franchise
fees.

Lobbyists are informing legislators that 23 percent of the video market is
served by DBS, yet those operators pay no franchise fees or taxes. In contrast,
California cable operators pay between 11.8 percent and 18 percent in taxes.

The CCTA-sponsored proposal would place an 8 percent tax on DBS service.

Legislators are on record as opposing new taxes. The cable industry even
researched whether the levy could be promoted as a service fee -- a difference
in semantics but more palatable to lawmakers.

But CCTA vice president of government affairs Gil Martinez said such a fee
must be directly related to the cost of oversight, so the cable industry is back
to the uphill battle of promoting a tax.

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