EchoStar fights states' effort to tax its satellite TV service
Copyright 2003 Denver Publishing Company
Rocky Mountain News (Denver, CO)
May 14, 2003 Wednesday Final Edition
EchoStar Communications Chairman Charlie Ergen has launched a defense against a move by four states to tax his company's satellite-TV service.
The Littleton-based company, in conjunction with industry rival DirecTV, has established a Web site where residents of those states can send e-mail messages to their legislators, objecting to the tax.
Ergen used his monthly Dish Network TV show to decry the "unfairness" of the tax to consumers.
"The cable lobby goes in and says, 'Gee, why don't you go in and tax my competition,'" Ergen said. "They try to use governments to do a job for them instead of letting the marketplace work. It's clearly unfair when cable companies are trying to get state legislators to tax satellite and not cable."
The four states that fit that description, he said, are California, Ohio, Nevada and Connecticut. Of the 23 states that tax satellite-TV service, all but two (Florida and North Carolina) also tax cable-TV service, said Andy Wright, president of the Satellite Broadcasting and Communication Association.
Colorado has no tax on either of the multichannel video providers, and no one in the governor's office plans to introduce a measure, said Mike Ciletti, deputy director and legislative liaison for the Governor's Office of Innovation and Technology.
"He (Gov. Bill Owens) would rather see spending cuts if we're trying to make up for a budget deficit," Ciletti said.
The preponderance of state budget deficits across the country has created fertile grounds in the cable industry's push for a satellite-TV tax, Wright said. His evidence is "anecdotal," he said.
"The local cable guys don't seem to be shy about saying, 'Yeah, we're doing this,' " he said. "They say they pay a local franchise fee, and they're trying to equate that - which is not a tax - to the tax on (satellite), to level the playing field."
Rob Stoddard, spokesman for the National Cable & Telecommunications Association, acknowledged that cable operators have used the "level playing field" approach.
"In many states, cable operators . . . do educate legislators about the burden of fees already imposed on cable operators," he said.
The states that want to create a satellite-TV tax are proposing rates of 5 percent to 8 percent, Ergen said.
The company's new Web site, www.stopsatellitetax.com, is designed to make politicians aware of the opposition, he said.