Satellite TV fee debated

03/22/2005
Reno Gazette-Journal
Anjeanette Damon

Several key lawmakers have vowed not to raise taxes this session, but already a bill is being considered that would charge satellite television subscribers a 5 percent fee.

Assembly Bill 151, which is being pushed by the cable television industry as a way to even the regulatory playing field, would raise money to buy communication equipment for emergency responders such as police, firefighters and ambulances.

The bill's sponsor, Democratic Assemblyman John Oceguera, a Las Vegas firefighter, said Nevada's first responders have been struggling for decades with equipment that makes communication between different agencies virtually impossible.

It is the same problem faced by firefighters who rushed to their deaths in the crumbling twin towers on Sept. 11, 2001, he said.

But some lawmakers on the Assembly Commerce and Labor Committee voiced reluctance Monday over stepping into the long-running rivalry between cable and satellite TV providers.

"I don't like this," said Assemblyman Morse Arberry, D-Las Vegas.

Nevada's two cable service providers, Charter Communications in Northern Nevada and Cox Communications in Southern Nevada, wrote the legislation, exempting themselves from the 5 percent fee.

The two companies have long had to pay a 5 percent franchise fee to the cities and counties they operate in for the privilege of using the public's right of way. The fee, which is not required of satellite television providers, is passed on to their customers.

Despite serving more than 80 percent of Nevada's television customers and having no competition from other cable companies, Cox and Charter said they are at a disadvantage because of the franchise fee they must pay that satellite companies don't.

"It's as if I could buy a product from Target or from Kmart and pay sales tax in one but not the other," said Bob Ostrovsky, a lobbyist for Cox Communications.

But Nevada's satellite TV companies said the fee would amount to an unfair tax on their customers.

"What we're looking at here is a penalty for our customers," said Brian Smith, of DirecTV, a satellite provider in Reno.

After the bill's hearing, Oceguera said he wasn't optimistic it would pass this session.

Oceguera estimated the legislation would raise about $6 million a year. Under the bill, the state would set up a commission to issue grants to local governments for radio equipment.

Satellite television providers said lawmakers would be leaving $28 million a year on the table if they allowed cable providers -- who serve the bulk of Nevadans -- to exempt themselves from the fee.

Cable lobbyists did their best to convince skeptical lawmakers their proposal wasn't a new tax.

"What you're also doing is asking to tax our satellite television consumers," said Assemblywoman Chris Giunchigliani, D-Las Vegas.

"I don't believe so," answered Steve Schorr, representing Cox Communications. "This isn't a new tax. It is just that they would no longer be exempted from paying the same fees that all the other customers are paying."

Because it is proposing a tax, AB151 needs a two-thirds majority vote in both the Assembly and the Senate to make it to the governor for signing.

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