National Associations Speak out on the Issues

For Immediate Release

June 20, 2007

Local Governments Ask Court to Stay FCC Ruling on Video Franchising

 

Washington, DC – June 20, 2007 – Local government and nonprofit organizations from around the country today asked a federal appeals court to block, pending judicial review, implementation of the recent franchising order adopted by the Federal Communications Commission (FCC), which may otherwise go fully into effect in the next several weeks. The organizations assert that the FCC Order will severely restrict the ability of local governments to protect their citizens, rights-of-way, community channels and public safety networks.  The organizations assert that the request for Stay is in the public interest since, among other things, under the FCC Order, “local franchising authorities will be forced to rush franchising decisions without being given an opportunity to ensure the interests of the public, including safety concerns, are met.”

 

According to the Motion for Stay filed today in the Sixth Circuit Court of Appeals, “The ‘Alice in Wonderland’-like quality of the Order, where up is down and down is up, is readily apparent.”  For example, in the Order the FCC created an arbitrary 90-day shot-clock for local governments to negotiate, review, obtain public comment and enact new franchise agreements, even though Congress under the Communications Act, gives local governments longer periods to complete more straightforward tasks, such as approving transfers or modification requests.  The organizations are also concerned that the Order will accelerate the widening of the digital divide, and result in a “race to the bottom, with local governments stripped of their authority to ensure that the public interest is protected.”

 

The organizations participating in today’s Motion for Stay include the Alliance for Communications Democracy (ACD), Alliance for Community Media (ACM), National Association of Counties (NACo), National League of Cities (NLC), National Association of Telecommunications Officials and Advisors (NATOA), and The United States Conference of Mayors (USCM).

             

Additionally, the organizations contend that if implemented without a court’s review, the FCC Order will cause irreparable harm to local communities and the citizens they serve, because among other things, the Order preempts important local laws and agreements, and undermines the ability of local governments to protect their citizens.  Congress has long established that local franchising authorities have the right to negotiate franchise agreements that meet the communities’ needs and interests since they contain provisions for community resources, including public, educational, and government access channel capacity,  programming support, and access to the services by schools, libraries, police and fire departments throughout our communities.

 

The organizations filed Petitions for Review of the FCC Order in April 2007, stating that the Order “exceeds the FCC’s statutory authority,” is “arbitrary and capricious,” “an abuse of discretion, unsupported by substantial evidence, and in violation of the United States Constitution.”  The Order also “violates both the Communications Act and Administrative Procedure Act’s public notice requirements,” according to the Petitioners.  Those Petitions are now pending action in the United States Court of Appeals for the Sixth Circuit.

For more information, contact:

 

ACD:                   Barbara Popovic, 312-738-1400

ACM:                   Anthony Riddle, 202-393-2650

NACo:                  Jim Philipps, 202-942-4220

NLC:                    Sherry Conway Appel, 202-626-3003

NATOA:              Steve Traylor, 703-519-8035

USCM:                 Elena Temple, 202-861-6719

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For Immediate Release                              

April 3, 2007                                                                       

 

Local Governments Ask Courts to Reverse FCC Ruling on Video Franchising

 

Washington, DC – Local government organizations representing municipal and county officials across America today asked the Federal courts to reverse the recent franchising order adopted by the Federal Communications Commission (FCC) that would severely restrict the ability of local governments to protect their citizens, rights-of-way, community channels and public safety networks.  In addition, the FCC order would lead to a tremendous reduction in the revenues received by local governments for use of their rights of way, as well as a loss of cable services to many governmental buildings and schools.

 

The formal Petitions for Review filed today said the FCC order “exceeds the FCC’s statutory authority,” is “arbitrary and capricious,” “an abuse of discretion, unsupported by substantial evidence, and in violation of the United States Constitution.”  The FCC order also “violates both the Communications Act and Administrative Procedure Act’s public notice requirements,” according to the Petitions. 

 

Organizations participating in the court challenge to the FCC order include the Alliance for Communications Democracy (ACD), Alliance for Community Media (ACM), National Association of Counties (NACo), National League of Cities (NLC), National Association of Telecommunications Officials and Advisors (NATOA), and The United States Conference of Mayors (USCM).

 

According to these groups, the repercussions of the FCC’s order are far-reaching and extreme on numerous fronts.  Local governments want competition in the video marketplace, but the FCC’s order ignores local interests, provides regulatory advantages for a few of the largest telecommunications companies in the country, and is simply contrary to law in many respects. 

 

Local government representatives also expressed concern over the loss of protections for their residents if the FCC order were to stand.  According to these officials, the order provides little recognition of the need by local governments to protect public rights of way, and to ensure that all their citizens benefit from increased competition and advances in telecommunications technology – not just a chosen few.

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For Immediate Release

September 6, 2006

The Real Effect on Local Government

Washington, D.C. –Local and state governments stand to lose $8 billion a year in revenues if Congress further restricts their ability to levy taxes or fees on the telecommunications industry. According to a study released today by a coalition of local government organizations, including The U.S. Conference of Mayors, the National League of Cities, the National Association of Counties, the National Association of Telecommunications Officers and Advisors, and the Government Finance Officers Association, the jobs of more than 150,000 teachers, police officers and firefighters could be on the line if the telecom industry receives preferential treatment.

We stand for fairness for all industries involved in providing telecommunications services.

 

The coalition study, The Local Government Perspective on Telecommunications Taxes, debunks claims by the telecommunications industry that it is unfairly taxed relative to other businesses. Instead, it shows that the industry pays essentially the same level of property taxes as other businesses, and, in some cases, lower corporate income taxes than many “general businesses.” The telecom industry also ignores that it is taxed at rates significantly lower than some other industries such as the utility industry.

Dearborn (MI) Mayor Michael A. Guido, President of The U.S. Conference of Mayors, said, “This study is important because it points out the flaws in the telecom industry’s 2004 COST Study, which significantly overstates the average state and local tax rate for the telecom industry. It would disturb me if any member of Congress would allow the COST Study to have influence over the debate to change our taxes on communications.”

Currently the Senate is considering a telecommunications reform bill that includes provisions that would severely restrict the ability of local and state governments to tax certain telecom services. Although the Senate bill would restrict only two sources of revenue for local governments, these provisions could represent the first step toward eliminating all telecom-specific state and local taxes. Some policymakers appear to be basing their support for telecomtax reform on this flawed 2004 COST Study funded by the telecom industry. As a result, coalition members are actively opposing any legislation that impedes their taxing authority.

Montgomery County (MD) Council Member Marilyn Praisner, a member of the National Association of Counties Board of Directors and Chair of NACo’s Telecommunications Steering Committee, said, “If Congress accepts the telecom industry’s claims and changes their tax rates based on the industry’s figures alone, the revenue loss to state and local governments would be significant.”

The Coalition’s study reveals that the estimated annual loss to state and local governments would be approximately $8 billion every year. Eighty-one percent of all cities with populations over 50,000 would see their tax revenues decline. As a result, they would either be forced to cut services to local residents or raise taxes on other taxpayers.

Among other glaring flaws, the COST Study omits essential information and improperly lumps taxes together with various kinds of user fees, including right-of-way fees – which pay for the industry’s use of public streets and sidewalks. The COST Study also ignores other special benefits the telecom industry receives under state and local law that other businesses do not. The Coalition believes that it would be foolhardy to enact federal laws based upon the weak and incomplete information in the COST Study.

“We stand for fairness for all industries involved in providing telecommunications services. There should be no favoritism to any one competitor so that we can have TRUE competition,” said Arvada (CO) Mayor Ken Fellman, former head of NLC’s Information Technology and Communications Committee and a member of NATOA’s Board of Directors. “In addition, we are elected to be the watchdogs for our communities and have a responsibility to ensure that our local economic futures are secure. Any restriction on local authority to levy fees or taxes will have serious and negative long-term impacts.”

The Coalition maintains that local governments are open to simplifying telecom taxes for the 21st Century. Local governments do not, however, accept the notion that ‘reform’ should be a disguise for federal preemption of state and local government taxing authority.

The Coalition also believes that the telecom industry’s plea for federally mandated tax favoritism opens the door to other industries asking Congress for similar special exemptions from state and local tax authority, and poses a dire threat to state and local tax revenues.

Read here the reaction of local governments to the FCC Vote on December 20, 2006 regarding the authority of local governments in franchising video service providers.