April 17, 2008

Jeff Perlman, Executive Vice President – Government Affairs
Clark Rector Jr., Senior Vice President – State Government Affairs
Robert Kohlmeyer, Manager – Government Affairs

Senate Commerce Committee Chairman Inouye Concerned Over DTV Transition Efforts

Senate Commerce Committee Chairman Daniel Inouye, D-Hawaii, said he remains concerned over the effectiveness of government efforts to inform consumers about the analog-to-digital television transition scheduled for completion in February 2009. In a DTV transition hearing, he asked Federal Communications Commission Chairman Kevin Martin and National Telecommunications and Information Administration acting head Meredith Atwell Baker to provide monthly status reports on the progress of the transition. Inouye cited a recent survey showing that while the number of people aware of the transition has increased from 51 percent to over 75 percent, 74 percent of consumers have misconceptions about the transition. Martin said it was too early in the process to evaluate how well the commission is handling the transition, but he praised broadcasters for their efforts in educating the public about the 2009 switch.
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FCC Chairman Martin Renews A La Carte Efforts

Federal Communications Commission Chairman Kevin Martin has renewed a push to implement á la carte cable television lineup options, resulting in added rebukes of his plan from Congress and industry. During questioning at a House Appropriations Subcommittee on Financial Services and General Government, Chairman Martin indicated a desire to invoke an existing clause in telecommunications law that would allow the FCC new oversight of cable systems in order to ensure an á la carte option. The next day, in a Senate Commerce Committee hearing, Ranking Member Ted Stevens, R-Alaska, told Martin to focus the agency's attention on ensuring a smooth analog-to-digital television transition, rather than "less time sensitive" efforts such as á la carte, which he described as a "solution looking for a problem." Chairman Daniel Inouye, D-Hawaii, and John Sununu, R-N.H., were also critical of Martin.

In addition, several cable television executives wrote a letter to Chairman Martin, saying that proposals to mandate á la carte channel lineups are anticonsumer and not within the commission's authority. ESPN President George Bodenheimer, MTV Networks Chairman Judy McGrath, Univision President Jeff Gaspin, Disney Media Networks Co-Chairman Anne Sweeney, Turner Broadcasting System Chairman Phil Kent and Fox Network Group President Tony Vinciquerra argued that an á la carte requirement would raise rates for most consumers and provide fewer options, especially for multicultural, religious and niche programming.
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FCC to Hold Second Public Net Neutrality Hearing

The Federal Communications Commission is holding a second public hearing on network neutrality practices and other Internet-related issues today. The commission will hear expert testimony on current practices, emerging technologies and recommendations for policy changes. Network neutrality is a proposal that would require Internet service providers to offer the same broadband access speed to consumers regardless of content. The meeting will be hosted by Stanford Law School's Center for Internet and Society at Stanford University in Palo Alto, Calif., and follows a similar hearing held in February at Harvard Law School.
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Florida Tax Proposal Faces Increased Opposition

A proposed constitutional amendment in Florida that would mandate expansion of the sales tax to unspecified services, possibly including advertising, is losing support in the state's Taxation and Budget Reform Commission. The proposal, spearheaded by Commissioner John McKay, would direct the Florida legislature to review current sales tax exemptions and eventually revise which industries should benefit from tax exemptions. State Sen. Mike Haridopolos, R-Melbourne, has been a vocal opponent of the plan, stating that if enacted, the plan could result in the "single largest tax increase in Florida's history." Sen. Haridopolos chairs the Senate Finance and Tax Committee and has called for a special hearing on the proposal. The Taxation and Budget Reform Commission must approve the amendment, which would then be put before voters. The AAF and local ad clubs have worked to oppose the changes, because any tax on advertising would immediately harm the industry, raise overall tax costs and cause economic damage.
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Maryland Legislature Repeals Computer Services Tax

The Maryland House of Delegates has repealed a tax on computer services that would have affected many small businesses in the state, including advertisers. After months of lobbying, legislators removed the tax on computer services such as Web design and database management, which are important to advertisers. The new bill replaces the proposed tax with an individual income tax surcharge on earnings over $1 million.
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