Not much fair about a tax on satellite TV

04/08/2005
Nevada Appeal
Editorial Board

One of the more insidious tax proposals we've seen in a while should be given a quick death in the Nevada Legislature.

It is AB151, which would impose a franchise "fee" on satellite television users. The bill is backed by the cable television industry with a "fair is fair" argument that because cable TV subscribers have to pay franchise fees, so should people who get their TV via satellite.

How's this for an idea? If cable TV operators and legislators really want to be fair, they could get rid of the franchise fee altogether. That would be fair to taxpayers.

But there's a reason cable TV companies are charged franchise fees, which are passed along to their customers. Cable television uses public rights of way to operate monopoly systems. The franchise fees help support things such as local-access stations, which presumably provide a public benefit in exchange for the use of the public right of way.

Satellite TV providers don't use public right of way. AB151 would earmark the franchise fees for "first responders," such as fire departments, which doesn't make much sense at all. What does the fire department have to do with satellite television?

In the minds of cable TV executives, sticking consumers with another tax is fair because their companies have lost a competitive edge to the satellite companies. Cable TV has to charge more on the monthly bill because of the franchise fee.

They should face the facts. Cable TV operated as a monopoly of sorts for years, reaped the profits, and paid little attention to the dissatisfaction it sowed by jacking up prices and being indifferent to customer service.

Along comes a competitor -- all-dish satellite TV -- who grabs a significant chunk of the market, often by touting cheaper rates, more choices and better service.

For this, Nevada needs a law to charge a new fee on its residents? No, thanks.

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