Sen. Neiderhauser explains the rationale behind the bill: cable subscribers pay more taxes because of franchise fees, so the excise tax needs to be reduced so that the total of excise tax and franchise fees is equal between the two platforms. This, however, is an entirely illogical basis for providing the discount. Franchise fees are paid to a municipal government as compensation for accessing right-of-way. This includes being able to tear up city streets and erect poles in order to deploy this infrastructure. It has no relationship or bearing upon the state excise tax.

The end effect of this bill is to give cable television providers an unfair advantage in the tax system, enjoying a much higher benefit for the same level of taxation. If you want to cut taxes, that’s fine, but doing so in such a manner as to create a greater inequity in the tax structure is absurd. I encourage you to write your legislator to ask them to oppose SB112 as currently written.

Upon a closer examination, it looks like it will do two things that can affect UTOPIA: network infrastructure can only be paid for via RDA through tax expendetures and not by bonding and the infrastructure must remain open to any service provider’s use. I disagree that it is necessary to take away the ability of the city to bond RDA funds for such projects (especially since they are very capital-intensive) and the “open” provision might be interpreted to mean that services such as transparent LAN can be provided directly by the city as wholesale transport. Obviously these changes can be quite troublesome. I’m going to speak against both changes and voice my concerns when the time presents itself.

Keep on refreshing as the meeting begins to see what’s going on.

3:00PM Movement to pass with favorable recommendation has passed unanimously with the note that the bill will be amended. The meeting is now adjourned. I’ll keep an eye on the amendments.

2:51PM UTOPIA cities are working on some amendments to improve the language in the bill. This may not be as bad as initially thought.

2:41PM Yeah, this is a direct response to Centerville. Sen. Bramble is concerned that RDA funds could be used to pay off UTOPIA’s bond debt. That’s why they’re looking at closing the bonding option for telecommunications.

2:38PM Sen. Bramble is taking the floor to discuss SB205.

2:28PM Sen. Bramble has arrived. I still don’t see any Qwest or Comcast reps that I recognize.

2:27PM SB205 isn’t going first as originally planned since Sen. Bramble isn’t here yet. Instead, we get to hear about uniform fees on canoes. This is the kind of legislative stuff that’s good for a nap.

2:25PM Looks like we’re up to 5 senators. With a quorum established, they can finally get started.

2:22PM Re-ordered so that the latest updates are at the top. Don’t know why I was doing it the other way.

2:20PM Looks like the committee chair got tired of waiting. He just left to go find some of the other senators that should be here right now.

2:18PM Okay, I know Senators are busy. But, seriously, it’s almost 20 minutes past when this was supposed to get started. And I’m here on my own dime.

2:07PM I still don’t see any of the usual suspects from Qwest or Comcast here today. It’s entirely possible they don’t yet have a hand in it. If we stay on the down-low, it may stay that way.

2:01PM As with most committee meetings, this one is going to start late. Looks like there’s still at least 3 members not here yet including Sen. Bramble and Sen. Stephenson.

1:55PM It’s still a pretty empty meeting room. I’ll bet the Senate has been pretty busy with today’s media circus. I’ve also heard that the bill is likely to be modified.

(Update 2/18/09 by Mike Taylor) – Here is the actual text of the bill, the link above shows the status.

Sen. Bramble’s boxcar legislation for the changes, SB205, may contain provisions that would allow such carrier-neutral infrastructure to be built with RDA money, but there’s still a very strong chance that the provision would be nixed and telecom spending banned outright. You’d better contact your state senators and representatives to make them aware of what’s coming.

UPDATE: The Standard-Examiner has more on the story.

It’s very important that you write, call or speak with your senator or representative to make sure they know how you feel about this change. UTOPIA cities are working to make sure that the language will allow for it so long as it is vendor-neutral, but your voices are much, much louder.

• Senator Wayne Niederhauser (R)
• Senator Mark Madsen (R)
• Curt Bramble (R)