New Local Telecom Legislation, Tax Reform Unlikely in Congressional Gridlock, Public Advocates Say
ORLANDO, FLA. -- Gridlock in Congress over the sequester will make it impossible for any telecom laws to pass this year, said Carolyn Coleman, National League of Cities (NLC) director-federal advocacy, at the National Association of Telecommunications Officers and Advisors/NATOA conference Wednesday. Republicans want to defund or delay the Affordable Care Act in exchange for lifting of the sequester, said Coleman. “We hope that there is some bargain to keep the government functioning, but none of us would be surprised by a government shutdown,” she said. “It works the same way for the debt ceiling, which will reach its limit in the middle of October, where if the administration would delay Obamacare, the Republicans would increase the debt ceiling."
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The Marketplace Fairness Act in Congress is moving slower than “we would like with the situation,” said Coleman. MFA would allow states to require online and other out-of-state retailers to collect sales tax. (See separate report in this issue.) “The House Judiciary Committee chairman is holding up the bill, and we ask city officials to plead for a hearing to their legislators,” said Coleman. In terms of tax exempt financing, the $1.2 trillion in discretionary funding is not going to balance the budget, said Coleman. “We need to look at entitlement programs for cutting spending,” she said. “The threat to cutting tax exemptions for counties looks attractive to Capitol Hill because of the revenue that could be produced.”
NATOA needs to look at the bigger picture when it advocates on behalf of the states, said Executive Director Steve Traylor. “We need to manage expectations because there is not much to do except stopping bills that hurt the states,” said Traylor. The MFA was able to gain some traction in Congress when NATOA changed its messaging strategy, he said. “The argument that this bill would allow state and local governments to collect taxes did not work, but members of Congress were willing to hear us more when we talked about how this resonates with the local businesses."
Several states have dealt with ILECs in their state legislatures that want to eliminate the spread of municipal broadband networks, said Marcia Rubensohn, Georgia Municipal Association (GMA) deputy director-governmental relations. GMA was successful in “beating back broadband preemption” twice in Georgia, where AT&T, Verizon and Windstream lobbied the state legislature to put an end to municipal broadband projects in the state, she said. “Their end game was to make sure that no new systems could be built and no systems could be expanding.”
Windstream made the case that it was investing $16 million in state infrastructure and shouldn’t have to compete with taxpayer-funded programs, but lost the argument because the telco received funds from the FCC, said Rubensohn. “We engaged in good, old-fashioned lobbying where city officials told their stories to legislators and they explained how the consulting costs [to develop the network] outweighed the benefits and how the lives of their citizens were positively affected,” said Rubensohn. Other challenges in the state include AT&T’s desire to build cell towers statewide and communications tax challenges by cable operators, she said.
Municipalities shouldn’t be able to create new networks where a network already exists that offers at least 1.5 Mbps speeds, said a Windstream spokesman. “We entered a public-private partnership to bring a network to Georgia,” he said. “Taxpayer dollars should not be used where an operational network already exists and you don’t need to build from scratch."
New telecom legislation regarding the states won’t be coming until next year at the earliest, said Yejin Jang, National Association of Counties (NACO) assistant legislative director. No new funding mechanisms are coming for broadband this year, said Jang. “We need to build out last-mile projects rather than middle mile,” she said. “With FirstNet decisions by states coming in 2014, there may be some opportunities for broadband growth.” A la carte cable legislation from Sen. John McCain, R-Ariz., is not something NACO is focusing on, said Jang. “We would look at it from a franchise perspective and we would not want to decrease our franchise fees.”