Bell Atlantic drafts satellite-dish tax bill

March 07, 1995|By Michael Dresser | Michael Dresser,Sun Staff Writer

If you have a satellite TV dish, Bell Atlantic Corp. wants you to pay a tax on the programs you receive.

The regional telephone company has written legislation, recently introduced in the General Assembly, that would let Maryland's counties and municipalities impose a 5 percent excise tax on any subscription-based video programming that competes with cable television.

In the near future one of the providers of such programming will presumably be Bell Atlantic, which says it is proposing to voluntarily accept a tax on itself for the good of the community.

Company spokesman Dave Pacholczyk said the company was willing to do so to help make up the revenue of cities and counties that might lose cable TV franchise fees as viewers switch to the telephone company's "video dial tone" service, which is expected to roll out in Maryland later this year or early next year.

"It's a way to make communities whole," Mr. Pacholczyk.

Sen. Barbara A. Hoffman and Del. Anne Healy, who agreed to introduce the legislation at the behest of Bell Atlantic, said that's basically what the company told them.

What they weren't told, both said yesterday, was that their companion House and Senate bills would slap a tax on satellite TV video providers. Those providers would be authorized to pass the tax on to their customers -- both those that use the traditional C-band satellite and those that have the smaller direct broadcast satellite dishes that have emerged as a competitor to cable over the last year.

"They didn't mention satellite to me," said Ms. Hoffman, a Baltimore County Democrat who chairs the Senate Budget and Taxation Committee. "They only talked to me about new technologies."

Ms. Healy, a Prince George's County Democrat, said she introduced it at the request of Bell Atlantic lobbyist Gary Alexander, a former Prince George's County delegate, just before the deadline for filing legislation for the current session. "I was not aware it had any effect on satellite dishes at all," she said.

The legislation does not mention the word "satellite" anywhere in its text. Instead it authorizes counties and municipalities to impose the tax on any entity that "sells video programming to end-user subscribers with access to video programming by any means of transmission, with or without use of wires."

That includes satellites, Mr. Pacholczyk said. He said that if Bell Atlantic paid a tax in lieu of cable franchise fees, so should other providers of information services.

"The legislation is intended to level the playing field," he said.

But satellite industry representatives contend that the bill is more about leveling competitors than any playing field.

"This is Bell Atlantic trying to stop us from competing in the marketplace," said Chuck Hewitt, president of the Satellite Broadcast and Communications Association at a conference in Washington last week.

Walt Frazier, a local satellite dish retailer, rejected Bell Atlantic's contention that satellite broadcasters should pay the same tax as cable and telephone companies. He noted that cable franchise fees are largely a payment for using local rights of way, easements and utility poles to run their cables. While telephone companies' video services are similar, he said, satellite services are not.

"The satellite dish owner does not use any of those rights of way or utilities," said Mr. Frazier, vice president for operations of Stansbury/Decker in Linthicum. He labeled the legislation "a roundabout way of killing the competition."

Mr. Pacholczyk said Bell Atlantic drafted the legislation only after extensive consultation with local government officials who have been concerned that the telephone companies' video services could avoid the franchise obligations and fees imposed on cable companies.

But Ms. Hoffman said she was having her doubts about whether her bill was such a good idea and whether Bell Atlantic officials were entirely straight with her.

"Taxing satellite dishes was never my intent, and if it's in there in a way that legislates a new tax, it will be deleted," said Ms. Hoffman

"To some extent I feel taken advantage of. I do feel they were less than candid," she said.

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