Hoffman pulls back on satellite-tax bill

March 09, 1995|By Michael Dresser | Michael Dresser,Sun Staff Writer

State Sen. Barbara A. Hoffman, who chairs the powerful Senate Committee on Budget and Taxation, said yesterday that she has moved to amend a bill she introduced at the request of Bell Atlantic Corp. to delete a provision that would have allowed a tax on satellite programming.

Complaining that the company failed to fully disclose the implications of the legislation, the Baltimore Democrat said she told a company representative she would be more wary of introducing bills for the company in the future.

"I told him you fooled me once but you can't fool me twice," said Ms. Hoffman.

"They don't have much defense. Basically they did not fully explain the bill," she said.

Dave Pacholczyk, a spokesman for Bell Atlantic, said there was "no intention of anything nefarious" in failing to tell Ms. Hoffman and Del. Anne Healey, the Prince Georges County Democrat who introduced a companion House bill, that the language of the original bill would apply to satellite services.

"It was just a case of our failure in not explaining to the legislators as well as we could have or should have," said Mr. Pacholczyk.

He denied satellite industry charges that the bill was an attempt to hobble a potential competitor for the phone company's planned "video dial tone" network. He said the company would continue to support the legislation without the tax on satellite programming.

Ms. Hoffman said she would still hold hearings next week on the bill, which would let counties and municipalities impose a 5 percent excise tax on subscription video programs, including shows Bell Atlantic plans to offer on its proposed "video dial tone" network.

Bell Atlantic said it proposed the legislation as a way of compensating communities that could lose money as the cable industry, which pays franchise fees to localities, loses market share to competitors.

So far the company's position that its planned video services will not have to have local franchises has prevailed before courts and the Federal Communications Commission. But the company has said it is willing to pay a tax in lieu of a franchise agreement in order to speed deployment of the network.

The controversy in Bell Atlantic's bill was a provision that would have let localities impose the tax on wireless services' programming as well as its own. Those services include large-dish (C-band) satellite, the smaller 18-inch Direct Signal Satellite business and private cable, a type of satellite service that beams signals directly to apartment buildings, hotels and institutions.

The news that the bill would put a new tax on those existing services was criticized by satellite program broadcasters, dish dealers and satellite TV subscribers.

Mr. Pacholczyk said satellites were included in the original bill as a matter of "tax parity" among competing video systems.

The Bell Atlantic initiative did pick up some important support yesterday from the Maryland Association of Counties.

Executive Director David S. Bliden said the bill was needed to "maintain the existing tax scheme" in the face of technological change. He said his organization will support amendments to the original language to ensure that Bell Atlantic is taxed at the same level as cable companies.

"It doesn't look like they're at the same level of contribution as the cable companies," Mr. Bliden said. He said Bell Atlantic had consulted with his group about ways to protect local jurisdictions from revenue losses.

He said the issue of taxing satellite TV programs should be on the table but added that his group would not contest Ms. Hoffman's decision to oppose such a tax.

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