Protecting the Public Interest in
Washington, DC
Presented by:
Tony Perez
NATOA
Gerard Lavery Lederer
Best Best & Krieger, LLP
Government Relations Services
AT&T Trials (IP Transition)
• Company has asked for permission to shift to
all IP services
• Commission has granted permission in two
locations
 West Delray Beach, Florida (Kings Point) and
 Carbon Hill, Alabama
• Why does local government need to be
concerned?
Government Relations Services
Open Internet Order
Verizon v. FCC.
• FCC is not going to appeal Verizon
• Notice of Proposed Rulemaking will be issued
to explore authority under Section 706 options,
including state barrier issue.
• Title II Stays Alive
• Municipal Broadband
 706 Authority
Government Relations Services
Update of the 96 Act
• What issues does local government need to
address/ be concerned about?
Government Relations Services
Comcast-Time Warner Merger
Franchise Authority Review Rights
• Is successor financially, technologically and
legally capable of honoring your franchise?
• Are their non-compliance issues to be
addressed with incumbent?
 Can you review?
 Will State review?
• What are the other opportunities to make your
voice heard?
Government Relations Services
E-Rate
The Federal Communication Commission’s Wireline
Competition Bureau (WCB) released a second public
notice seeking focused comment on three issues raised in
the E-rate Modernization Notice of Proposed Rulemaking.
• Comments in the proceeding are due April 7, and reply
comments are due by April 21 to address:
• (1) How best to focus E-rate funds on high-capacity broadband,
especially high-speed Wi-Fi and internal connections;
• (2) Whether and how the Commission should begin to phase down or
phase out support for traditional voice services in order to focus more
funding on broadband; and
• (3) Whether there are demonstration projects or experiments that the
Commission should authorize as part of the E-rate program that
would help the Commission test new, innovative ways to maximize
cost-effective purchasing in the E-rate program.
Government Relations Services
FCC HAS COMMENCED NEW
RULEMAKING ON WIRELESS
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Rulemaking Structure
• In re Acceleration of Broadband Deployment
by Improving Wireless Facilities Siting
Policies, WT Docket No. 13-238, FCC 13-122
(9/26/2013).
• Four areas addressed:
1. Should FCC expedite National Environmental
Policy Act and National Historical Preservation
review processes for DAS and small cells, and
categorically exclude these deployments from
review?
Government Relations Services
Rulemaking Structure (cont’d)
2. Should FCC exempt temporary antenna structures
from federal review?
3. Should FCC adopt rules re: Section 6409? What
rules?
4. Should FCC alter its shot clock rules, to, e.g.
• determine when an application is complete and
address remedies if shot clock not met;
• address DAS;
• address moratoria, muni siting preferences.
Government Relations Services
FCC Questions re Implementation of Sec.
6409
• What does “shall not deny and shall approve”
mean?
 Are there any special circumstances where an
application may be denied?
 Does it require approval where a structure violates
safety codes, or otherwise places persons and property
at risk?
 Can it be read to allow imposition of conditions?
Government Relations Services
2013 CAP ACT / S.1789
PROBLEM
• Cable Act Unnecessary
Limits on the Use of PEG
funds.
Government Relations Services
SOLUTION
• Bill amends the Act to
ensure that PEG fees can
be used for any PEG
purpose, i.e. money can
be spent for operating as
well as capital.
2013 CAP ACT / S.1789
SOLUTIONS
• Bill amends the Act to ensure
PEG programming is transmitted
• Discriminatory Treatment without
 “material degradation and without
of PEG channels
PROBLEM(s)
altering or removing content or
data” and
 such signals shall be viewable “by,
every subscriber of the cable
system without additional service
or equipment charges…”
 No fee for connection.
Government Relations Services
2013 CAP ACT / S.1789
PROBLEM
• Loss of PEG Support and
Localism
SOLUTION
• Cable operator must
provide greater of:
 2% of gross revenues;
 Historical support
received (i.e. prior to the
state franchise) or
 State franchise financial
obligations.
Government Relations Services
2013 CAP ACT / S. 1789
Problem
• Loss Of PEG Channels
Government Relations Services
Solution
• Cable Operator must
provide number of
channels in place day
before state law was
passed. If none on that
day, then up to 3
channels at request of
locals.
2013 CAP ACT / S.1789
PROBLEM
• Operators claiming they
are video providers, not
cable and therefore not
subject to PEG
obligations
Government Relations Services
SOLUTION
• Act is amended to ensure
providers using wired
facilities in the rights of
way are treated similarly
and are subject to similar
PEG requirements.
TAXES
WHAT IS TAXABLE
N.B. This is not only a federal
issue!
Government Relations Services
Tax “Reform”
• Tax Exempt Bonds
 Chairman Camp’s proposal would impose a 10 percent surtax on
interest income from otherwise tax-exempt municipal bonds and
applies to interest earned on both new issues and outstanding
bonds.
• This would result in increased costs for local governments and special
districts to borrow and raise the cost of infrastructure investment by
capping the tax exemption for municipal bond and eliminating private
activity bonds. In addition to the municipal bonds, .
• State and Local Tax Deductibility
 Chairman Camp’s proposal would eliminate the deduction for
personal state and local income, property and sales taxes. Such a
proposal would rollback taxpayer protections against doubletaxation by eliminating the federal deduction for local
government tax payments.
Government Relations Services
CAVEATS/GIVENS
• Communications tax “reform” at the federal or state level is a
very dangerous game for local governments who have the
most to lose, the least to gain.
• Local governments’ future ability to tax or impose fees on any
type of communications service provider is at serious risk.
• Tim Lay Rule: “Beware if it has ‘fairness’ in the title of the
bill!”
• Communications tax reform may be inevitable in 2014 at the
Federal level. Don’t lose at the state level before then.
• Reform need not be bad for local governments.
• Locals must be far more active participants if interests are to be
protected.
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Government Relations Services
CAN CONGRESS HARMONIZE
ELECTRONIC TAXATION?
Internet Tax
Freedom
Cell Tax Morat’m
Marketplace
Fairness
Possible On-Line Tax
Reform
Digital
Goods
Government Relations Services
The Permanent Internet Tax Freedom Act
(S 31/HR 434) or (S. 1431)
Internet Tax Freedom Forever Act (“ITFFA”)
20

ITFA has been in effect since 1998, currently scheduled to
expire in November, 2014

ITFA “walls off” from state and local taxation the largest,
and fastest growing, form of communications — broadband

ITFA must be repealed or allowed to expire as a condition of
reform or this is simply an industry tax reduction exercise,
not true tax reform

Left in place, the ITFA will eventually “tax exempt” all, or
almost all, of the entire telecommunications industry’s
services
Government Relations Services
Wireless Tax Fairness Act
H.R. 2309, S.1235
• Last Congress (HR-1002) passed the
House, went nowhere in the Senate
• Would impose a 5-year moratorium on any new
“discriminatory”, or any increase in existing,
state or local taxes on wireless services; would
grandfather existing taxes and exclude taxes
imposed by vote of community
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Government Relations Services
The Digital Goods and Services Tax
Fairness Act of 2013 -- S.1364
• Legislation creates a nationwide “tax preference” for
online goods and services over competing brick-andmortar sales by limiting state and local taxes on
“digital goods and services.”
• Downloaded music and videos;
• Pay-per-View (PPV) and video-on-demand (VoD)
revenue from the cable franchise fee revenue base
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Government Relations Services
Marketplace Fairness Act
(S. 743 and H.R. 684)
• Passed Senate on a strong bi-partisan basis
• Allows states and local governments to collect
sales and use taxes on remote (typically online)
sales to their residents
• Aims to eliminate the current disadvantage
suffered by brick-and-mortar retailers vis-à-vis
online retailers
• Generate funds
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Government Relations Services
DON’T FORGET THE THREAT AT
THE STATE LEVEL:
State Communications Tax Reform
Government Relations Services
Communications Tax “Reform”
• Basic approach
• Collapse all communications-related taxes and fees (cable
franchise fees, perhaps PEG fees, DBS, landline telecom &
wireless) into a single tax
• Move responsibility for imposition, collection and auditing
of the tax to the state level
• Examples include VA, FL, KY, OH, and NC
• DOWNSIDE: Eliminate communications-related ROW fees
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Government Relations Services
Communications Tax “Reform” (cont’d)
• Benefits for industry:
• Lower tax administration costs
• Lower taxes, except perhaps for DBS
• Greater protection against future tax increases
• Risks to local governments:
• Loss of ability to control local tax structure and policy, and
thus control over local budget revenues
• Loss of auditing authority to ensure correct amounts are paid
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Government Relations Services
SCORE CARD
Name of Bill/
Bill Number/ Status/
Why it’s Important to
Local Government
STELA
REAUTHORIZATION
Awaiting Introduction
MARKETPLACE
FAIRNESS ACT
Provides local
government authority
to impose existing
sales and use taxes
on local purchases
made on-line from a
remote seller-Value is
estimated at over
$23B a year
S 743
Last Congressional Action
Issues
While no bill has yet been
introduced, I have added to
Sen. Rockefeller &
the list as this is the lone
Not a huge issue for
Thune letter asks
“must pass” piece of
local governments,
stakeholders for input communications legislation
but tracking to ensure
in this Congress.
it does not become a House begins plans for
vehicle for an anticlean mark up before
local government
end of first quarter
initiative
and
H.R. 684
Passed Senate and
awaiting House
Action.
House GOP staff
meeting in early Feb
was not very positive
about bill moving –
but has yet to
determine how to
deal with ITFA.
Update as of 3/19/14
Rep. Greg Walden wants a discussion
draft to be circulated by March 2014.
S 743:
6/14/2013Referred to the
Subcommittee on Regulatory
Reform, Commercial And
Antitrust Law
Question is -- what impact
possible departure of
Finance Chairman Baucus
and elevation of Sen.
Wyden (D-Or) might have
on legislation.
H.R. 684: 4/8/2013Referred to the
Subcommittee on Regulatory
Reform, Commercial And
Antitrust Law.
H.R. 684:
Also, unknown whether
42 Democratic Cosponsors
House Judiciary will turn its 24 Republican Cosponsors
attention to Immigration
Reform as has been
recently reported.
House Hearing set for 1st
week of March
Government Relations Services
S 743:
22 Democratic Cosponsors
6 Republican Cosponsors
1 Independent Cosponsor
SCORE CARD
CAP ACT
S. 1789
Provides fixed number of
channels and financial
support for PEG
operations despite state
laws and eliminates
limitation of PEG support
used only for capital
needs.
The Permanent Internet
Tax Freedom Act
Would forever ban state
and local taxing internet
access – and could
potential grow as more
services are considered
access.
12/10/2013- Referred to the
Committee on Commerce, Science,
and Transportation.
S. 1789:
1 Democratic Cosponsor
Markey co-sponsor
Referred to Senate Commerce.
S 31/H.R. 434


S 31:
1/22/2013- Referred to the
Current bans Committee on Finance.
expires in
11/ 2014.
No actions
H.R. 434
2/28/2013-Referred to the
to date
Subcommittee on Regulatory
Reform, Commercial And Antitrust
Law
Government Relations Services
Question is -- what impact possible S 31:
departure of Finance Chairman
1 Republican Cosponsor
Baucus and elevation of Sen.
Wyden (D-Or) might have on
legislation.
H.R. 434: No change
Also, unknown whether House
Judiciary will turn its attention to
Immigration Reform as has been
recently reported.
SCORE CARD
Internet Tax Freedom
Forever Act (ITFFA)
Would forever ban state
and local taxing internet
access – and could
potential grow as more
services are considered
access
Wireless Tax Fairness Act
Would impose a five year
moratorium on new or
discriminatory state and
local wireless taxes.
S. 1431
8/1/2013
Current bans Referred to the Committee on
expires in
Finance.
11/ 2014.

No actions
to date.
Question is -- what impact possible S 1431:
departure of Finance Chairman
22 Republican Cosponsors,
Baucus and elevation of Sen.
11 Democratic Cosponsors
Wyden (D-Or) might have on
legislation.
Also, unknown whether House
Judiciary will turn its attention to
Immigration Reform as has been
recently reported.
H.R. 2309
7/15/2013
No actions to Referred to the Subcommittee on
Regulatory Reform, Commercial And
date.
Antitrust Law
Government Relations Services
H.R. 2309:
139 Republican Cosponsors
80 Democratic Cosponsors
SCORE CARD
Digital Goods and
Services Tax Fairness Act
of 2013
Would create certain
carve outs from taxation
of on-line services – This
bill is almost the
opposite of the
Marketplace Fairness
Act.
Prohibiting In-Flight
Voice Communications
on Mobile Wireless
Devices Act of 2013
Would allow for
issuance of regulations
prohibiting individuals
[on-duty crew and
federal law enforcement
acting in official capacity
exempt] on aircrafts
from engaging in voice
communications using a
mobile device during
flight.
S. 1364
No actions to
date.
7/25/2013Referred to the Committee on
Finance.
Question is -- what impact
S 1364:
possible departure of Finance
3 Republican Cosponsors
Chairman Baucus and elevation of 1 Democratic Cosponsor
Sen. Wyden (D-Or) might have on
legislation.
Also, unknown whether House
Judiciary will turn its attention to
Immigration Reform as has been
recently reported.
H.R. 3676
12/10/2013Referred to the Subcommittee on
Aviation.
2/11/2014Ordered to be reported by Voice Vote.
Was cleared by voice vote.
Government Relations Services
H.R. 3676:
18 Republican Cosponsors
13 Democratic Cosponsors
SCORE CARD
Unlocking Consumer
Choice and Wireless
Competition Act
Repeals a Library of
Congress (LOC)
rulemaking
determination regarding
the circumvention of
technological measures
controlling access to
copyrighted software on
wireless telephone
handsets for the purpose
of connecting to different
wireless
telecommunications
networks.
H.R. 1123
Legislation was passed on 2/25/14
House consent calendar despite
opposition of leading Democrats.
(House GOP had a FOP letter of
support on opposing bulk
unlocking.)
2/26/14Received in the Senate and read
twice and referred to the
Committee on the Judiciary.
Government Relations Services
H.R. 1123:
7 Democratic Cosponsors
3 Republican Cosponsors
Notable Filing Deadlines
Due Date
Proceeding
March 28
Facilitating the Deployment of Text-to-911 and other Next Generation 911
Applications
April 7, 2014
E-Rate Comments Due
April 21, 2014
E-Rate Reply Comments Due
April 21, 2014
Replies due in Annual Assessment of the Status of Competition in the Market for
Video Programming
April 28
Facilitating the Deployment of Text-to-911 and other Next Generation 911
Applications
30 Days after Fed Reg.
Publication
Multilingual EAS Comments Due
45 Days after Fed. Reg.
Publication
Multilingual EAS Reply Comments Due
Government Relations Services
Questions
• Email Tony or Gerry for a
copy of the presentation.
Government Relations Services
Contact Information
Tony Perez
President
NATOA
Director
Seattle Office of Cable
Communications
206 386-0070
Tony.Perez@Seattle.gov
Government Relations Services
Contact Information
PHOTO
Government Relations Services
Gerard Lavery Lederer
Gerard.Lederer@bbklaw.com
Best Best & Krieger
2000 Pennsylvania Avenue N.W.
Suite 4300
Washington DC 20006
Phone: (202) 785-0600
Fax: (202) 785-1234
Cell: (202) 664-4621
Website: www.bbklaw.com