America's independent, non-partisan advocate for overburdened taxpayers.

Press Release


30 Citizen Groups, Think Tanks, Tell Congress: Clear Away Taxes and Regulations, Let New Providers Compete with Cable for Video Services

For Immediate Release July 27, 2005

(Alexandria, VA) -- Better choices and lower costs for consumers of video services are right around the corner if only policymakers will remove the tax and regulatory barriers to competition: that's the message 30 citizen groups and think tanks -- representing millions of Americans -- are delivering to Congress in an open letter today. The non-partisan National Taxpayers Union (NTU) organized the statement.

"[W]hile there is much to applaud in the sensible policies of Congress and the current Administration to facilitate a competitive communications industry, we believe there remains a series of formidable obstacles with the potential to negate the many advantages of a truly deregulated marketplace," the joint letter to lawmakers noted. "Local franchise regulations, fees, and taxes on both cable companies and new entrants in the video services market are having the practical effect of impeding the spread of competition, thereby depriving consumers of the economic benefits this process normally provides."

As the statement outlined, the 1996 Telecommunications Act "spurred exciting developments" in phone and Internet services, including lower prices. However, absent any direct, consistent competition, cable TV prices have actually risen 85 percent in the past 10 years. This lack of affordable alternatives for consumers is directly related to the 30,000+ local regulatory and tax regimes whose antiquated, monopolistic systems of "franchising" shut out new entrants to the marketplace. One example is Internet Protocol Television, which could utilize high-speed fiber optic lines to provide a combination of speed, individualized options, and lower costs currently unseen in the video services sector.

The number of signatories reflected the diverse range of taxpayer and consumer interests at stake in the issue of video services competition. Participants in the statement to Congress included respected policy groups such as the Center for Individual Freedom and the Public Interest Institute, as well as national-level organizations like the Council for Citizens Against Government Waste, Americans for Prosperity, and the Small Business & Entrepreneurship Council. Underscoring the importance of reducing video services tax burdens were more than a dozen state and local citizen groups, representing members in California, Iowa, Michigan, Tennessee, and West Virginia, to name a few.

According to the signatories, federal legislation to simplify and open up the franchising process, such as the Video Choice Act of 2005, would be a "positive step toward clearing the regulatory underbrush," although lower-level governments as well as Washington should consider additional reforms. "Congress can continue to move in this direction by ensuring that future legislation removes regulatory barriers on communications services and fosters an environment where companies compete for consumers based not on local regulatory compliance, but on price, quality, and service," the letter concluded.

The 350,000-member National Taxpayers Union is a non-profit citizen group founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Among its many activities in the technology policy debate, NTU has supported making the federal Internet access tax moratorium permanent, advocated repeal of the 3 percent federal telephone excise tax, and actively opposed tax hikes on telecom services in over a dozen states and localities during the past year. Note: The open letter to Congress, along with a list of signatories, is available at www.ntu.org.

-30-

Click here to download the coalition letter in PDF