© 2010 WCCA. Site design by
Today’s video marketplace is intensely competitive. More than 30 million consumers, representing about a third of the market, subscribe to a video provider other than cable. Yet in 44 states and the District of Columbia, cable customers pay more in state and local taxes and fees than do subscribers to cable’s greatest competitor, Direct Broadcast Satellite (DBS) service. To erase this inequity, some states have tried to ensure that all multichannel video providers operate on a level playing field.
Why do cable operators have to pay taxes or fees to state and local governments?
The Cable Act allows a cable franchising authority (usually a state or local government) to collect franchise fees from cable operators providing service. This franchise fee, typically five percent of each customer’s monthly bill, is payment by the cable operator as a condition of the franchising authority's permission to offer the cable service.
Have any states created a level playing field for all multichannel video providers?
Some states have sought to ensure that the overall level of taxation is equal among providers. A few state and local governments have passed laws to equalize the burdens among video providers. These states include Kentucky, North Carolina, Tennessee and Florida. Providers of Direct Broadcast Satellite (DBS) service have been largely unsuccessful in challenging these states in court.
Source: NCTA