Virginia Adds Teeth to Service-Theft Laws

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Virginia lawmakers last week approved new language for the state's theft-of-service bill, updating its protections to account for such new products as video-on-demand and high-speed data.

The bill was modeled on laws enacted in Pennsylvania and Maryland last year. The state Senate approved the bill earlier this month 37-0; it passed the House of Delegates unanimously on March 6.

The bill would impose civil penalties computed on a per-criminal-act or per-device basis. That's crucial language, because under federal law, prosecutors can't impose per-device penalties on set-top traffickers.

The new Virginia bill allows for treble damages, or $1,500 per box, for criminals deemed to be pirate box merchants.

In light of the broad legislative support, Gov. Mark Warner is expected to sign the bill, said Virginia Cable Telecommunications Association president Kathryn Falk.

Warner, a veteran of the wireless telecom industry, understands the technical issues involved, said Falk. The governor was a partner in Columbia Capital Corp., a technology venture-capital firm.

Also this legislative session, lawmakers attempted to follow Florida's example by enacting a flat tax on telecommunications services.

In Florida, local franchise and utility taxes are being replaced by a single levy paid to the state, which then divides the revenue with local regulators. Florida cable operators pay as much as they did prior to the flat tax, but save money because of centralized accounting.

The VCTA supports the flat-tax effort. Virginia's local telecom tax rates are in the top 10 percent in the country, and differ from city to city, according to the association. Cable operators will submit their input to the committee by August.

The VCTA also fought off an attempt this session by realtors, apartment owners and home builders to eliminate Virginia's "anti-kickback" statute. State law currently allows property owners to bar a telecommunications provider from their site, but if they do allow a provider in, they cannot demand an access fee.

Any change would have a multimillion-dollar effect on the telecommunications industry, according to lobbyists. The bill died in committee, but will be resurrected next year.

Another competitive threat was muted this session when the legislature included cable-backed "level playing field" language into a bill that allowed municipal utility companies to enter the telecom business.

A law banning such expansion stood for four years, but was struck down last year in court. The enabling bill, however, should prevent cross-subsidization, because it allows for public scrutiny of non-utility spending.

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