By Ron Thaniel
August 7, 2006

In a letter to Senate Majority Leader Bill Frist and Minority Leader Harry Reid July 20, the Conference of Mayors urged the Senate to oppose the Senate Commerce, Science and Transportation Committee approved Advanced Telecommunications and Opportunity Reform – Consumers’ Choice and Broadband Act of 2006 (H.R. 5252).

Joining the Conference of Mayors on the letter were the National Governors Association (NGA), the National Conference of State Legislatures (NCSL), the Council of State Governments (CSG), the National Association of Counties (NACo), the National League of Cities (NLC), and the International City/County Management Association (ICMA).

The coalition of local and state groups said, “The cumulative impact of the measure’s preemption on state and local governments runs counter to our federal system and applies a federally-mandated command-control model approach to traditionally state and local issues.”

Furthermore, the coalition said, “The measures sweeping preemptions eviscerate the long-standing partnership between federal, state and local governments in shaping the nation’s communications policies.”

Highlighting our concerns, the letter states, “The Senate Commerce, Science and Transportation Committee mark would unilaterally preempt carefully crafted state and local laws to encourage competition and protect the public interest; unnecessarily interfere with state and local revenue systems; and replace robust state consumer protection standards with federal standards established by federal bureaucrats not accountable to state and local communities or consumers.”

In particular, the Conference is extremely concerned with the tax preemption amendments added to the measure during Committee markup prior to the July 4 Congressional Recess. Those measures would make permanent the moratorium on Internet access taxes set to expire in 2007 and establish a new three-year moratorium on state and local mobile (cell phone) services taxes. In addition, bill would allow providers of video (cable) service to use the public rights-of-way in a community, but pick and choose which neighborhoods they wish to serve while bypassing all other completely.

The Conference of Mayors had negotiated substantial improvements in the legislation prior to last month’s markup. Those included:

• Preservation of local control and authority to manage rights-of-ways (ROW);

• Courts, rather than the Federal Communications Commission (FCC), to settle ROW disputes;

• Attorney fees are the responsibility of each party in ROW disputes;

• Lump sum payments in calculating the per-subscriber equivalent for Public, Educational and Government (PEG) as an alternative to the 1 percent of gross revenues for PEG support fee;

• Franchise fees on taxes the videos service operators pay; and

• Clarification on the timeframe from 75 days to 90 days for action by cities on new video franchises.

Even with these improvements to the bill, the revenue impacts of the tax preemptions are enormous and would undermine local budgets.

In discussions with Committee Chair Ted Stevens’ (AK) staff prior to the markup, the Conference made it absolutely clear that we would oppose the bill if the tax preemption measures were added. Senator John McCain (AZ) sponsored the mobile services moratorium amendment and Senator George Allen (VA) sponsored the Internet access tax moratorium amendment.

Even though the Committee approved the bill last month, the text of the final markup has not yet been released. Stevens and the Bells are working to line up 60 senators willing to vote to overcome any “holds” placed on the bill.

“History has shown states and local governments to be good stewards in the effort to promote competition, deploy broadband access and protect the public interest. Congress should honor its longstanding partnership with state and local governments by opposing legislation that unnecessarily preempts state and local authority,” wrote the coalition of local and state government associations.