WASHINGTON-The Cellular Telecommunications Industry Association late last week petitioned the Federal Communications Commission to pre-empt excessive or discriminatory taxation of commercial wireless carriers, calling the growing trend “a profound moral hazard.”
The filing represents the wireless industry’s most serious attempt to date to combat wireless taxation in cities and states across the nation.
The industry argues it has the law on its side: 1993 auction/deregulatory legislation and the 1996 telecom reform bill.
“The reasons for Congress’ actions and the resulting need for commission intervention are readily apparent: the importance to the national economy of telecommunications services generally and CMRS (commercial mobile radio service) in particular,” said CTIA.
The association added that Congress “necessarily and explicitly contemplated federal, state and local government policies which uniformly decrease, rather than expand, costs imposed upon telecommunications firms.”
“In general, NACO would oppose any pre-emption by a federal agency of counties’ ability to collect revenue,” said Robert Fogel, assistant legislative director of the National Association of Counties.
The National League of Cities declined to comment and the U.S. Conference of Mayors did not respond to a request for its reaction.
In the Sept. 26 filing, CTIA cited various examples of state and local efforts to tax wireless users and carriers:
Florida Gov. Lawton Chiles proposed a 50 cents per month tax on each cellular telephone to raise $11.3 million annually.
Minnesota, Mississippi, Texas and Michigan have legislation to tax wireless subscribers to subsidize E911 service.
New Hampshire, California, Massachusetts, Vermont, Maine, Illinois and West Virginia are considering E911 taxes on wireless users.
Montgomery County, Md., voted in July to extend the existing telephone tax to CMRS users.
Fairfax County, Va., proposed a maximum $3 per month wireless access fee, but the measure was defeated.
Kentucky has assessed a tax on cellular carriers since 1992 based on future revenue.
Oregon’s Department of Revenue has factored in the cost of Western PCS I Corp.’s PCS license in the property tax assessment for the firm.
West Virginia has a lawsuit over a per-pop tax assessment on a cellular license.
CTIA may well get a sympathetic hearing at the FCC, where top officials have signaled their concern with the tax issue. In general, the FCC has given substantial weight to federal jurisdiction over states rights in interpreting and implementing the new telecommunications law.
Legislation is a possibility, too.
Despite the fact that the GOP-led Congress touted new federalism, lawmakers approved a national antenna siting policy over the objections of cities and counties in the Telecommunications Act of 1996.
But, like interconnection and antenna siting, the federal-state debate is constitutionally and politically tricky. Cities and states will be receiving far less federal assistance in the future. The pressure will be on to find new revenue sources. Witness the wireless tax initiatives already in play.
“The commission has-from its inception-held jurisdiction to pre-empt state and local attempts to impose unreasonably excessive and discriminatory tax burdens or assessments upon all telecommunications carriers and their services,” said CTIA.
“Use of that authority here will promote efficient competition in the local exchange market by ensuring that CMRS and other telecommunications providers are not unduly limited by governmentally imposed costs and burdens.”
