A new tax that would add an estimated $55 a year to annual satellite TV bills could be back on the Springfield agenda this year.
The bill is backed by the cable TV industry, which says satellite TV gets an unfair break because it avoids the fees and regulations that cable gets. A similar bill passed the state Senate last year with a bare minimum of votes, but never made it out of the House.
"We are selling this as business parity," says Joe Handley, president of the Cable Television & Communications Association of Illinois.
The cable industry argues it has to provide public access channels (which means giving up channel space), pay pole attachment fees, pay entertainment taxes in Chicago and pay franchise fees to local municipalities. Meanwhile, the industry argues, it's competitor - satellite TV - gets a pass.
Opponents of the legislation include DirectTV, the Dish Network, the Hospitality Business Assocation of Chicago, the Illinois Licensed Beverage Association, the Associated Beer Distributors of Illinois, the Satellite Broadcasting and Communications Association and the Illinois Manufacturers' Association.
The new tax would be set at 5 percent of satellite TV bills, and opponents argue the 1.3 million satellite viewers in Illinois can't afford that in a bad economy. Satellite TV now has about 30 percent of the market.
And while satellite TV escapes some of the fees the cable industry pays, it has costs of its own. The 13 satellites that hover 22 miles above the Earth each cost about $300 million to $400 million to design, build and maintain.
Moreover, cable doesn't serve some areas where satellite TV is the only option, so parity isn't an issue there, they say. And it provides a wider range of foreign-language programming.
"This is a discriminatory tax on families and businesses that rely on satellite television," Andrew Reinsdorf, Senior Vice President, Government Affairs, DIRECTV, said in December. "An unfair deal is an unfair deal and subscribers in Illinois should not be forced to pay higher taxes simply because the cable industry wants to gain a competitive advantage at their expense."
As for legislators, revenues from a new tax would be one way to help close the state budget gap. It could be part of comprehensive rewrite of telecom laws later this year.
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