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Revised--Florida and Franchise Reform

Steven Titch
May 29, 2007, 2:59pm

I busted my own post Friday in which I mused as to whether the Florida's franchise reform bill, Consumer Choice Act of 2007 (HB 529), which was signed into law by Gov. Charlie Crist last week, killed franchise fees. Turns out I was half-right. The bill prohibits any further imposition of franchise fees, but that's because they were already dead. In another progressive move, Florida a few years back did away with franchise fees, telecom excise taxes and other such surcharges that over time, created a discriminatory tax regime where the same types telecom, video and data services were taxed differently depending on the company offering the service, i.e., telephone, cable or wireless. My sources tell me that taxes were streamlined into a single general Communications Services Tax that was designed to be uniform across all service providers. Essentially this tax replaced local cable franchise fees. The good news is that state legislators of Florida understand the convergence of the industry and service providers and that taxing one phone service from one company at one rate, and another at another rate, was not fair to consumers nor service providers. The bad news is that the legislature essentially leveled all taxes up, so consumers saw no tax savings. Indeed, in the new Heartland Institute report on telecom taxes, Jacksonville and Tallahassee came out one and two in terms of aggregate tax burden in a survey of 59 cities. As for the Florida franchising reform bill, it ushers in video competition by all but voiding existing local franchising agreements. Incumbent cable and telephone companies may apply immediately for a statewide franchise once the law becomes effective July 1. The Florida franchise bill also contains no build-out requirements. The bill also calls for new entrants to provide the same number of public, educational and government (PEG) channels to a community as the incumbent, and a minimum of two if there are no PEG channels at present. The municipality, on the other hand, is obliged to fill each PEG channel with an average of 10 hours of programming per day.


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