Commentary

Revised–Florida and Franchise Reform

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.

Steven Titch served as a policy analyst at Reason Foundation from 2004 to 2013.

Titch's work primarily focused on telecommunications, the Internet and new media. He is a former managing editor of InfoTech & Telecom News (IT&T News) published by the Heartland Institute. His columns have appeared in Investor's Business Daily, Total Telecom, and America's Network, among others.

Prior to joining Reason in 2004, Titch covered the telecommunications industry as a journalist for more than two decades. Titch was director of editorial projects for Data Communications magazine where he directed content development for supplemental publications and special projects. He has also held the positions of editorial director of Telephony, editor of Global Telephony magazine, Midwest bureau chief of CommunicationsWeek, and associate editor-communications at Electronic News.

Outside of the telecom industry, Titch conducted rich media and content development for publishers and corporate marketing groups. He has also developed and launched his own web-based media, including SecuritySquared.com, an on-line resource for the security industry.

Titch graduated cum laude from Syracuse University with a dual degree in journalism and English.