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Vote to Defund Public Broadcasting Fails
We’ve long been advocates of ending taxpayer subsidies to public radio and television, but it wasn’t until recently that the issue generated a media firestorm. Given the bickering initiated by pundits on both sides of the aisle, Republican efforts to defund National Public Radio (NPR) have been accused of being purely political. The House actually held a voted today on a measure to end all federal funding for NPR, which collects funds from the quasi-governmental Corporation for Public Broadcasting (CPB) as well as the Departments of Commerce, Education and the National Education Association. The vote, as expected, failed on an almost straight party line (239-171).
I can’t vouch for the motivation of Republican leaders, but I can, however, assure you that there is a sound non-political argument for ending federal funding for the CPB. I’ve blogged about this issue before, but I’ll reiterate a few of the reasons why NTU supports a move to end taxpayer-subsidized public broadcasting:
As you may recall, we sent a letter of support to Representative Doug Lamborn (R-CO) for his legislation to end all funding for CPB. Senator Jim DeMint has said he plans to introduce a similar bill after the Thanksgiving recess, so that will get the issue moving along in the Senate as well. While defunding legislation is unlikely to pass this year, it stands a much stronger chance in the new Congress.
Lawmakers must act now to eliminate the deficit and begin to trim down our $13+ trillion debt. We’ve said it before, and we’ll say it again, public broadcasting is an ideal place to start.2 Comments | Post a Comment | Sign up for NTU Action Alerts
Why is Keizer, OR intent on harming its economy with wireless taxes?
Just as the Oregon Trail was essential to the formation and growth of Oregon in the 19th century, reliable and inexpensive wireless communication is essential to the formation and growth of Oregon’s communities in the 21st century. But now, sadly, state and local governments in Oregon who, like other governments across the country, are starving for revenue to pay for overspending are targeting wireless communication services with discriminatory taxes.
On Monday, the City of Keizer, Oregon will consider a proposal to impose a “wireless license fee” of five percent on wireless communication services, including cellular phones. Additionally, the proposal callsfor a "per foot" line charge to cover providers with facilities in the city's jurisdiction.
Some think that these taxes will fall only on business. But the reality is that the proposed wireless fees will severely harm consumers and small business owners in Keizer. As the City Manager has pointed out in the proposed ordinance, telecommunications providers will simply pass the cost of any fees onto their customers. Thus, if the City of Keizer raises increases fees on wireless service, the people and businesses that use wireless services will face higher costs and have strong incentive to use the service less or seek out service elsewhere that costs less, which will be available in surrounding cities and counties. In these times of economic uncertainty and when strong communities are needed now more than ever, the City of Keizer should not give consumers an incentive to spend their dollars elsewhere or do less communicating.
Governments, no matter whether state or local, cannot keep tapping taxpayers with higher fees, taxes and surcharges to pay for more services and programs. In these challenging times, government simply has to do more with less rather than taxing and harming economic activity facilitated through communications. Instead of raising taxes, the City Council should look at ways to reform the city’s budget to find savings to provide its services.
If you live in the Keizer area, you can contact the City Council by clicking here. The hearing is also open to the public and will take place at the Keizer City Council (Keizer Civic Center, 930 Chemawa Road NE) at 7pm. You can find more details on at www.keizer.org or by calling (503) 390-3700.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The issue of retransmission consent, which I talked about in "Adventures in (Seemingly) Obscure Telecom Law" a while back, is going to be the subject of a Senate hearing next week during the lame-duck session. The reason it's getting this kind of attention is a well-publicized spat that led to a 16-day blackout of Fox programming for Cablevision's customers in the New York area. Fox then took to (briefly) blocking Cablevision customers from accessing their programming online, hilariously causing net neutrality advocates to cry foul (even though net neutrality is intended as a restriction on internet SERVICE providers, not CONTENT providers). Though I'm hardly some prescient genius, the concluding paragraph of my post from last month seemed to predict exactly this course of events:
Well, guess what. A crisis arrived, though it was a different major sporting event (the World Series) that was partially blacked out, and angry consumers (and Senators) are now yelling "There oughta be a law!" Senator John Kerry (D-MA) has been pushing draft legislation that would further insert the FCC into these tortured retransmission consent negotiations. I alluded to this in my original post, but I really can't say it any better than my friend Jerry Brito did at the Tech Liberation Front:
"The lesson of this latest confrontation should not be that we need to “reform” retransmission consent rules to add FCC arbitration as Sen. Kerry and some broadcasters and video distributors are suggesting. Instead, it’s that given a competitive market for programming, as the FCC has acknowledged exists in New York, we should plain and simply get rid of must-carry and retransmission consent rules altogether and allow a real free market to work. Without such a move, I see a lot more blackouts in the future."
Congress drafted rules that protected content providers from what was essentially a cable monopoly back in 1992, a monopoly that no longer exists. The result is that content providers are exploiting that protection to the fullest, leading to episodes of brinksmanship like the Fox-Cablevision fight. The time has come for a free-market rewrite of telecom law generally and retransmission consent specifically, and forgive me if I think our would-be Windsurfer in Chief is the wrong guy to lead it.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Taxpayers win in court
Taxpayers have won an important first-round victory in the battle against taxing Internet sales.
Late Monday, a U.S. district court judge in Seattle ruled that the First Amendment of the U.S. Constitution forbids state tax authorities from knowing what goods customers purchase from online retailers. At issue was an effort by North Carolina to require online retailers to report the names, addresses, and purchases of their customers so that they could collect sales taxes from the transactions. Amazon, which filed the lawsuit challenging the effort, successfully argued that such “data demands would make customers think twice about buying controversial products” when they purchase books, movies, and music.
Across the country, states starving for tax revenue, yet unwilling to reduce spending, have gone after out-of-state online retailers. The states claim that the out-of-state retailers have an obligation to collect sales taxes on purchases with their citizens. But not according to a 1992 U.S. Supreme Court case, which says that retailers are not required to collect a state’s sales tax unless they have a physical presence within the state.
Despite the Supreme Court’s ruling, several states, namely New York, Colorado, and North Carolina, have zealously sought to collect taxes from out-of-state online retailers through creative schemes commonly known as “Amazon laws.” Basically, these laws require out-of-state retailers to collect taxes because they have in-state affiliates, which are websites that link to the retailers. Other variations of Amazon laws require the retailers to report purchases to the state or send notices to customers that they owe sales tax. Online retailers have shut down their affiliates programs rather than meet these burdensome requirements. What these Amazon laws have done is cost the state revenues because without the affiliates, there is no business activity for the states to tax.
This case is an important victory for taxpayers. Not only does it protect Internet commerce from tax revenue-hungry states, but it also ensures the right to privacy in online shopping. But it is only a first step. Appeals will likely follow. There are also other states considering similar laws. Stay tuned. Rest assured, NTU will be watching these cases closely.0 Comments | Post a Comment | Sign up for NTU Action Alerts
A Call to End Taxpayer-Subsidized Public Broadcasting
If you're even the slightest media junkie, I’d be willing to bet you’ve heard that National Public Radio (NPR) news analyst Juan Williams was fired. The decision supposedly came as a result of Williams’ comments on Fox News’ The O’Reilly Factor. I’m not going to ask you to comment on whether or not you thought Williams’ comments were appropriate, or whether or not NPR should have done what they did, because all of this really leads into a larger, more significant question: should American taxpayers continue to subsidize public radio and television?
We’ve spoken out on this issue before but, in light of this week’s news, it seems to be generating more attention than ever before. Back in June, we sent a letter of support to Representative Doug Lamborn (R-CO) for his legislation to end all funding for the quasi-governmental Corporation for Public Broadcasting (CPB), which partially funds NPR. Here is an excerpt from the letter that explains our position in greater detail:
“While CPB is a private, non-profit organization that raises its own funds through many different outlets, taxpayers still bear the burden of approximately 13 percent of its total income. CPB received $420 million from taxpayer subsidies in 2010 alone, and that number is likely to grow considerably in the coming years. There is little doubt that public broadcasters disseminate useful information and quality programming, but taxpayers simply should not be responsible for funding a private entity that exists in a robust market serving consumers of many preferences and income levels.
Furthermore, it is unjustifiable that federal funding of the CPB has risen 26 percent over the past decade when the original purpose of that exercise has become virtually obsolete. Initially, the Public Broadcasting Act was created to institute taxpayer-backed public broadcasting in order to make telecommunications services available to all citizens. That is hardly a concern today as we find 99 percent of Americans in possession of a television and over 95 percent of them have access to the Internet.”
Senator Jim DeMint has said he will introduce a similar bill in the Senate once Congress reconvenes, so we will keep you posted on that legislation.
If Congress truly desires to restore fiscal responsibility and accountability to Washington, public broadcasting is a good place to start. This issue isn’t any more critical today than it was four months ago. It’s just more visible, more relevant, which we’re hoping paves the way for past-due Congressional action. We’re not concerned with the politics of it all. We’re looking out for taxpayers, and we believe defunding CPB is the right thing to do.2 Comments | Post a Comment | Sign up for NTU Action Alerts
With the country atwitter about tax cuts, there are dozens of important issues that are firmly placed on the backburner of Washington’s agenda. As a result, many important issues are getting short shrift in the current debate. Here’s one I bet you’ve never heard of: retransmission consent. Here’s the Cliff’s Notes version: broadcasters (think ABC, for example) are charging ever-higher amounts to cable companies/other television service providers (think Comcast or DirecTV) to carry their content to consumers, leading to higher costs or blacked-out content. So, what’s the limited-government, free-market response to this? As with everything in Washington, it’s complicated…
When a broadcaster creates content (say, a television show like American Idol), they then negotiate with cable and satellite television providers in order to allow them to carry the content to your TV screen (i.e. Comcast paying the Philadelphia Fox affiliate for the right to carry American Idol and the other content they create). With increasing frequency, broadcasters are demanding huge fees in order to allow their content to be shown on certain systems. That can lead to higher costs for consumers or, in the worst case scenario, black outs of programming if they cannot come to agreement. The most famous recent example is when 3 million New Yorkers were unable to watch the beginning of the Oscars because the local ABC affiliate and Cablevision couldn’t agree on fees to retransmit the program.
So, what’s the problem, you say? Why should anyone care about negotiations between two private businesses? After all, if the providers aren’t willing to pony up to broadcasters in order to secure retransmission rights for their content, then so be it. Well, as with everything else in Washington, it’s a bit more complicated than that.
For example, broadcasters are allowed to choose a “must carry” designation, which forces television providers to carry their content and are also able to dictate on what specific channel their programming appears. Also, providers are limited to negotiating with one local affiliate, meaning that RCN Cable in the Washington, DC metro area may only negotiate with, say, CBS’ affiliate in Washington, DC. If they can’t come to an agreement with the DC affiliate, they’re not allowed to go to a Baltimore affiliate and try to purchase the content from them at a potentially lower cost.
This can all be traced back to 1992 when the retransmission consent rules were last rewritten. The marketplace looked very different back then, as most consumers had only one choice for cable television service. Congress structured the rules in favor of broadcasters because they were viewed to have less negotiating power in the face of monopoly cable providers of the early 1990s.
Nowadays, people can often choose between three or four providers, from cable to satellite to new fiber optic networks. That means that broadcasters have much more negotiating power than they once did, which is reflected in the prices they’re charging for their content.
The cable companies and other providers have put together what they call the American Television Alliance, a group which is dedicated to reforming retransmission consent laws. Some of their recommendations are common sense, but they’re also reflective of the core problem that we face here: too much government involvement in the first place, given how vibrant and competitive this market is. That’s why the ideal answer is not to simply rebalance the scale so that government grants equal benefits to broadcasters and providers. The best answer is to overhaul our telecom law in a way that reflects the realities of the modern, competitive marketplace.
This applies to far more than just retransmission consent, of course. A comprehensive free-market overhaul would allow us to get government bureaucrats out of the way on a number of other issues, like network neutrality, where there are attempts to force regulation of the internet under outdated and burdensome Depression-era monopoly telephone provider laws. There are also lingering issues Universal Service Fund abuse, e-911 taxes on wireless service, and ongoing battles regarding spectrum allocation that could and should be dealt with in a much more intelligent and modern fashion.
The way that Congress works, this stuff never gets dealt with until a crisis has arrived, but we can all hope that won’t be the case this time around. Otherwise, you may only see the evidence when the Super Bowl gets blacked out because your affiliate and cable company couldn’t come to an agreement. Then, you'll inevitably get a bunch of angry consumers yelling "There oughta be a law!"
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Odds & Ends
A few odds and ends that I've been saving but haven't gotten to yet:
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NTU opposes online sales taxes in California
On Monday, NTU sent a letter to the budget conferees of the California state legislature, urging them to reject a proposal to tax internet shopping. In relevant part, the letter read:
"States that have attempted to prey upon online retailers beyond their borders – either through sales tax reporting on Internet transactions or the creation of "affiliate nexus" schemes – have not raised the desired revenues. In fact, North Carolina officials report that the state's online affiliates tax has not yielded any revenue in the first six months of existence. Additionally, Rhode Island administrators say that their treasury has actually lost revenue following enactment of the tax. Now New York is mired in litigation over the constitutionality of its tax and Rhode Island is considering repeal. Several online retailers have also announced their intention to terminate their relationships with affiliates in Colorado due to its sales tax reporting requirement for online transactions. A loss of business activity is the last thing any state needs during this time of economic uncertainty. In practice, these tax schemes force higher prices on consumers, or even precipitate business closures."
The conferees postponed a vote on this proposal, following our letter and opposition from online retailers and customers. We'll continue to monitor this proposal and oppose it.
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This coming Thursday marks the next step in the raging debate regarding the ambitious effort of the Federal Communications Commission (FCC) to regulate the Internet. On June 17th, the FCC will conduct an open meeting in which they will discuss their plans for so-called "reclassification" of broadband Internet in order to impose net neutrality regulations, an issue that has been the cause of much dispute in the past several months.
The root of this disagreement lies in the Comcast Corp vs. FCC U.S. Court of Appeals ruling this past April. It's a long story (surprise!), but Comcast had been exposed as slowing down traffic on some torrent sites in order to prevent their network from being overloaded and the FCC attempted to crack down on them legally. The Supreme Court ruled, however, that the FCC lacked the authority to dictate how the Comcast Corporation could manage its network. But even without that legal action, Comcast had announced that it would stop the practice after hearing an outpouring of opposition from their paying customers. The FCC was soundly rebuked for its regulatory overreach, and Comcast agreed to stop slowing traffic so as to avoid angering any more of their customers. End of story, right? Not exactly.
The Federal Communication Commission decided to retaliate against this Appeals Court ruling by redefining their terms. The FCC is likely to begin proceedings on Thursday in their plan to "reclassify" broadband Internet from its current status as an "information service" to a "telecommunications service" regulated under Title II of the Communications Act. For those of you who aren't regulation nerds (and really, who is?), that basically means that the Internet would change from being regulated under the lighter regime that has allowed its exponential growth in recent years to a regime intended to regulate monopoly telephone providers back before World War II. Because, you know, the Internet is totally what Congress had in mind when drafting Title II in 1934. That seemingly minor regulatory change could generate any number of extremely onerous new restrictions, like having the government dictate prices.
Though the FCC hopes to present this reclassification in light of warm, fuzzy terms like "consumer protection," the real question here is this: who should have the ability to manage the multi-billion dollar networks that comprise the heart of the Internet, bureaucrats in the FCC or the businesses that built, own, and maintain them?
On Thursday, this issue will be discussed in light of three specific points:
The solution to this issue lies not in a cagey reclassification of terms, but rather a free market approach. Call it a "fourth way," if you're feeling Genachowski-esque. Recently a group of broadband and high-tech companies -- the Broadband Internet Technical Advisory Group -- voluntarily collaborated in order to facilitate discussion on how to create their own solution to network management and technical Internet issues. Much-deserved kudos to the member companies for cooperating to try to face the real issues of network management head on, as many of them have been at each other's throats for years in the marketplace and on net neutrality, for cooperating to try to face the real issues of network management head on. This is the solution we should be advocating because the last thing the Internet needs is an army of bureaucrats deciding how it should be managed.
After all, do you think we should trust the regulation of the Internet to the geniuses behind the unintentional comedy that is the FCC KidsZone? I mean, the site has information about cutting edge technology like PAGERS and ANSWERING MACHINES!
So how can you get involved? The best thing to do right now is to call your Member of Congress! It seems like a cliché, but it works and it's necessary. Since the FCC seems determined to do whatever the heck it wants, rules be damned, Congress needs to assert its authority to tell Genachowski to simmer down. Call your representatives and tell them you oppose net neutrality and reclassification in order to regulate the Internet!
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New Series at Government Bytes: And WE'RE Astroturf? Part I
You've no doubt heard liberal Members of Congress and other interest groups calling the Tea Party movement "astroturf," a play on the term grassroots. Like our good friend Nancy, for example...
Or the liberal pro-net neutrality group Free Press, which has an entire section on its site devoted to "outing" so-called Astroturf operations. This page includes a handy-dandy widget with a graphic of large corporations pulling the strings of Congress.
They claim that the whole movement is the invention of a bunch of Beltway insiders backed by piles of corporate cash. For them, it simply does not compute that ordinary Americans could be fed up with trillions of dollars in debt, tax hikes, and runaway spending. It MUST be the orchestrations of rich puppet-masters in DC, right? Instead of spending hours debunking those claims, I'll point to a post I made on our old blog after the massive 9/12 March on Washington that NTU helped to organize. Several hundred thousand people from all across the country do a better job of dismissing these silly claims than I could here. Instead, the "And WE'RE astroturf?!" series will focus on liberal activists employing exactly the kind of shady strategies that they accuse us of using.
So, that group I mentioned, Free Press? The ones that have a page on their site to expose "Astroturfing?" Last week, they were outed as being the true authors behind a letter supposedly written by Congressman Jay Inslee (D-WA). The letter is being passed around to various Congressional offices to solicit support for FCC Chairman Julius Genachowski's radical effort to thumb his nose at the limits of his regulatory authority. But the properties of the electronic file show that the real author of the letter was not Mr. Inslee or a member of his staff, but none other than Free Press Policy Director Ben Scott!
I've worked in government affairs for the National Taxpayers Union for nearly five years now. Never in my life have I ghost-written a letter for a Member of Congress, nor have I offered to or been asked to do so. It's just not a part of the discussions we have with Congressional offices.
So, Free Press, what say you? Are you pulling Jay Inslee's strings? What other seemingly spontaneous pro-net neutrality efforts have you coordinated? How many other letters or bills have you written behind closed doors without getting caught?2 Comments | Post a Comment | Sign up for NTU Action Alerts