Carriers oppose Texas tax

Wireless operators are crying foul at a proposed piece of legislation now before the Texas State Senate. The bill, sponsored by Rep. Phil King of Weatherford, would attempt to replace the patchwork quilt of telecom regulation with a statewide tax of 3.95% on the sale of any service — wireline, wireless or cable.

Billed as promoting fair “intermodal competition,” the measure would actually pile more taxes onto an already heavily taxed wireless customer, according to the Cellular Telecommunications & Internet Association.

King's bill would eliminate right-of-way fees and local franchise fees paid by telephone and cable companies. The CTIA maintains that there is no reason to lump its members into that pot because wireless companies already paid billions of dollars for spectrum and millions more to acquire the land on which to build cell sites.

However, the bill's chances may be flagging, as the cable industry has now joined the fight against the measure. The Texas Cable & Telecommunications Association (TCTA) came out in opposition to a key component of the bill in mid-April.

“Imposing a statewide tax on communications services, including video, satellite, cell phones and landline phones, is a major shift in public policy and needs further study,” said Tom Kinney, chairman of TCTA and president of Time Warner Cable-Austin. “This would replace local franchise fees and has not been studied well enough to take forward at this time.”