Washington — A federal tax designed to subsidize local TV stations should replace the current system that allows broadcasters to help their finances by demanding cash for carriage from cable operators, Insight Communications CEO Michael Willner said last week.
Willner said his TV-tax proposal would ensure a second revenue stream for broadcasters while relieving cable operators from having to pay for programming that is offered to the public free of charge.
“Set up a way of collecting a tax. If you want people to pay for broadcasting, collect it from everybody evenly. They do it in Britain,” said Willner, a panelist at the annual Association of Cable Communicators (formerly Cable Television Public Affairs Association) Forum 2007 on March 12 here.
Insight is the No. 9 U.S cable operator with 1.3 million subscribers, mostly in the Midwest.
In recent years, TV-station groups have become more aggressive in using their legal right to withhold their signals to demand cash payments. Recent examples include Sinclair Broadcast Group's three-month standoff with cable operator Mediacom Communications.
Willner indicated that the TV tax would fund a federal royalty pool, similar to the one used to compensate sports leagues and Hollywood studios.
“This would be in lieu of retransmission consent, and all broadcasters would share in the pool,” said Willner, who didn't suggest the size of the tax. “We'll collect it. We don't care — but as long as everybody gets [taxed] equally.”
National Association of Broadcasters executive vice president of communications Dennis Wharton called the proposal “laughable” and said the “NAB isn't interested in raising taxes on American citizens.”
The tax would alter a regulatory mandate that works to the disadvantage of cable companies, including the requirement that every cable subscriber must purchase the program package that includes local TV signals, Willner said.
“The reality is, the system is broken,” he added. “It really doesn't work because what it's doing is charging certain parts of the population to watch over-the-air television while it doesn't charge other parts of the population.”