Support Fair Taxation. Support Competition.
Let Congress Know That You Support HR 1019

Big cable is at it again—they’ve raised the price of their service, and now they want to raise the price of yours by convincing state legislatures to enact discriminatory taxes on satellite TV customers.

• Not wanting to compete in the marketplace on price and quality, Cable has deployed its army of lobbyists in state after state for one reason: to gain a competitive edge over satellite TV by punishing customers who’ve chosen satellite TV with discriminatory taxes.
• In the first half of 2009, Cable persuaded 9 states, including New York, Texas, Vermont, Nevada, Indiana, Arizona, and Connecticut, to consider or introduce measures that would have levied a new tax—ranging from 5% to 7%— on households solely because they have chosen satellite TV over cable.
• With state budget deficits reaching historic levels, these bills will only grow in popularity. HR 1019 ensures that competition for video services will take place in the marketplace on issues like price, quality, and service—not in the halls of state legislatures.

Who do discriminatory taxes on Satellite TV affect? All pay TV subscribers.

• Discriminatory taxes on satellite TV obviously hurt satellite TV subscribers: higher taxes strain the budgets of everyone who pays them.
• Even worse, many of the families that would be unfairly burdened by these discriminatory taxes live in rural and lower income area where cable refuses provide service. Satellite TV is often their only option for a reliable signal. Thus, a discriminatory tax on satellite is the same as discriminating against families based on where they choose to live.
• But the impact doesn’t stop there. By granting a competitive edge to cable, discriminatory taxes reduce cable’s incentives to provide better programming and service at lower prices.
• So, when states discriminate, competition suffers, service gets worse, quality goes down, and prices go up. Indeed, the only real beneficiaries of this discriminatory tax are the cable companies themselves.

Cable’s claim that these discriminatory taxes are justified because Satellite doesn’t pay franchise fees is flat out wrong.

• Cable paradoxically claims that discriminatory taxes on satellite TV are necessary to achieve “tax parity” because satellite providers don’t pay local “franchise fees.”
• Franchise fees are nothing more than the purchase price that cable companies pay to municipalities for specific and valuable property rights—the right to use the public rights-of-way and the right to dig up the public streets and sidewalks to lay their wires.
• Satellite companies do not pay franchise fees for one simple reason: They do not use nor need access to the public rights-of-way. Making satellite subscribers pay franchise fees—or an equivalent amount in taxes—would be like making airline passengers pay a fee for using railroad tracks. They don’t use them, they shouldn’t have to pay for them.
• That’s not to suggest that satellite companies don’t have their own costs of doing business—like building, launching, and maintaining satellites in outer space. The difference? Satellite does not break these costs out on consumer’s bills and call them taxes.
• The bottom line: Taxing satellite TV subscribers to offset the fees that cable pays to deliver its programming amounts to nothing more than a tax on innovation.

The State Video Tax Fairness Act ensures that states tax all forms of pay TV the same. No discrimination. Who could be against that?