March 2007

Today is the 60th day of the Texas legislative session. This is a significant marker because it is the last day that bills can be filed. Unlike 2005…the telecom front has been fairly quite this session. However, while we are not proactively seeking major legislation at this time, our industry continues to work with legislators on a number of important issues such as universal service reform and video franchise competition.

As discussed below, TCTA recently held our annual Cable at the Capitol event and I want to personally thank all of our cable company and programmer attendees as well as our sponsors who made everything possible – THANK YOU (and see you next year!) As always, we value your input, so please e-mail TCTA with any questions or concerns about the industry.

Dale Laine, President

Cable Industry: Top Stories

• Legislative Update: Regulated Industries Hearing on the State of Telecommunications in Texas
  
  
• Issue De Jour: Universal Service Reform
  
  
• Cable at the Capitol: A Huge Success!
  
  
• In the News...
  

LEGISLATIVE UPDATE

On February 15, 2007, the House Regulated Industries committee held a hearing to discuss the “State of the Communications Market”. TCTA Board Chairman Ron McMillan testified on behalf of the cable industry. During his remarks, McMillan suggested areas where government can contribute to making the free market work: universal service reform; tax parity between cable and satellite companies; and franchise “regulatory reform”. The key points are outlined below:

• USF Reform. Texas taxpayers pay about $650 million into the Universal Service Fund each year with $425 million going to a “Large Carrier Fund” which is distributed to just four large telephone companies. The cable industry does not believe this level of subsidy is appropriate in deregulated markets (74% of phone lines in Texas are deregulated.) We ask only that the Legislature encourage and support the PUC in its effort to implement reforms to the Large Carrier Fund to ensure a more transparent, accountable system. (For more on USF reform click here).
• Tax parity between cable and satellite companies. Cable customer pay up to 8% more in taxes and fees on video service than do satellite video customers. This inequity puts cable providers at a disadvantage in the marketplace.

Click here to watch the full committee hearing broadcast.

ISSUE DE JOUR: Universal Service Reform

Legislators Should Pull Excess Taxes Off Texans
Tyler Morning Telegraph Editorial, February 26, 2007
"The maze of telecommunications taxes is as hard on consumers' pocketbooks as it is difficult for them to understand," says Bill Peacock, director of the foundation's Center for Economic Freedom. "Texans pay the third highest level of state and local telecom transaction taxes in the nation," he says. "This includes state and local sales taxes, municipal franchise fees, and charges for the Texas Universal Service and Texas Telecommunications Infrastructure funds." ...The Universal Service Fund adds about 5.65 percent to local and intrastate phone service, for more than $500 million per year, he explains. "While the fund helped promote the transition to a market-based system, today the fund is more often a hindrance than a help in fostering competition, essentially subsidizing some consumers and businesses at the expense of others," he says.  Read more.

Click here to read the Texas Public Policy Foundation’s policy brief on telecommunications taxes (February 2007).

CABLE AT THE CAPITOL

On February 20-21st, 200 cable company representatives and programmers came to Austin for a two-day blitz on the Capitol. In addition to meeting with legislators, the industry blocked off Colorado Street and held a programmer showcase featuring interactive demonstrations from a number of premiere programmers including The Food Network, Discovery Networks, Animal Planet, The Outdoor Channel, and many more. And on the night of the 21st, the industry held a Songwriters Showcase for legislators which featured some of the best singer/songwriters in the business – having written for the likes of Willie Nelson, George Strait, Reba McEntire, George Jones, Vince Gill among others. Special thank you to our Cable at the Capitol sponsors.

In the News

TV Tools — Letter to the Editor
March 2, 2007, Wichita Times Record

I applaud your recent editorial, "Resistance is futile,” pointing to the importance of parental control over children’s television viewing. With the number of entertainment choices consumers continue to expect and receive, parents must also take advantage of the technological tools to make appropriate decisions regarding what their families watch on television.

At Time Warner Cable, we’re committed to giving the Wichita Falls community more choice and control over what to watch on television…By going to www.timewarnercable.com, parents can find family friendly programs and learn to use their DVR to watch the shows they want to watch, when they want to watch them. They can explore the easy-to-use blocking tools available through their digital receivers or gather information to help understand TV ratings. And among the many links to other organizations that also promote responsible television viewing, parents may subscribe to free, monthly email newsletters providing tips and recommendations.

Cable TV's New Aim: Free Us From Tangle Of Boxes and Remotes
Wall Street Journal, February 21, 2007

The new (cable) technology is software that behaves like an operating system that runs on digital cable set-top boxes and other devices. The technology, is to set-top boxes what Microsoft Windows is to computers. Adding a new feature, like the ticker, is an easy task regardless of the cable system. That ease is expected to spark a flurry of creativity among software companies, as new applications will no longer have to be tailored to fit separate cable systems.

Astroturfing Congress
Forbes Magazine, February 13, 2007

Astroturf groups serve a variety of companies, trade associations and unions, and encompass all points of the political compass. The aim is simple: to deceive Congress and regulatory agencies into believing that there is a groundswell of public concern about their pet issues.…Some have the gall to put the word "consumer" in their title. Consumers For Cable Choice, for instance, bills itself as a consumer advocacy group, fighting against cable TV companies, but has received backing from Verizon and AT&T.