Legislation in Congress threatens to take away cities' power to set customer-service standards and tax rates for cable companies.

For about a week, Ronald Carey constantly called Comcast about a credit he was promised on his cable bill, but never received.

The Pembroke Pines resident sat through hours of hold music before getting to an operator, who told him there was no record of the 13 days in October and November when he was without service.

Carey called Pembroke Pines City Hall to complain. Within 30 minutes, he received a call from Comcast saying his next bill would be virtually free.

The city's intervention was the product of customer-service standards set by Pines for Comcast.

But new bills filed in Congress threaten to stop or limit local governments' ability to tax and set customer-service rules for cable providers.

The changes are being pushed by telephone companies such as AT&T and BellSouth, which want to enter the cable business.

The cable industry opposes the changes, saying they will give unfair advantages to the phone companies. Cities also oppose the changes, fearing a loss of income from cable taxes and a loss of power to protect residents.

''It probably would have taken a while to get my problem resolved if it weren't for the city,'' said Carey, who switched to satellite service a few weeks ago. ``Any business that wants to come into the city needs to be regulated by the local governments that they serve. If not, all hell could break loose and you'd see all types of problems.''

Similar legislation has been introduced in past years, but this year's proposal is being taken more seriously because of probable amendments to the 1996 Telecommunications Act, which governs the industry.

The National League of Cities has made the issue one of its legislative priorities this year.

Broward cities such as Fort Lauderdale, Hollywood and Pembroke Pines each stand to lose more than $1 million per year if the local cable tax were eliminated entirely.

The Hollywood City Commission adopted a resolution Friday asking Congress to reject the proposal. Hollywood received more than $900,000 this year in cable taxes from Comcast.

LOCAL CONTROL

''It starts to take away the city's authority to . . . make rules for people who want to do business in our city,'' said Lorie Mertens, Hollywood's intergovernmental affairs director. ``We want to be able to control what happens in our city.''

Three bills have been filed in the U.S. House of Representatives and the Senate dealing with cable regulations.

Each would limit the amount of the local cable tax as well as strip 30,000 cities nationwide of their franchise agreements.

The agreements require companies to provide cable access to all areas and set customer-service rules such as how fast companies must answer the phone or respond to complaints. Most agreements also include free government-access channels, which allow residents to watch city commission meetings on television.

Because of a state law passed in 2001, cable and telephone companies pay as much as 6.9 percent of revenues generated in a city to the state Department of Revenue, which then distributes the money to local governments.

Florida's new Republican, U.S. Sen. Mel Martinez, is one of 14 co-sponsors of a bill that would limit the local tax to no more than 5 percent, while eliminating contractual obligations to cities.

Rep. Clay Shaw, a Fort Lauderdale Republican, is among the 39 co-sponsors of a similar bill in the House.

Another bill filed in the Senate would eliminate the local cable tax altogether.

The Senate bill Martinez is co-sponsoring promotes consumer choices by inviting more companies to compete for customers, which would translate into lower rates, said Kerry Feehery, spokeswoman for Martinez.

''The senator believes our communications laws must be updated for the 21st Century. It's time to relook at the communications law so that they are in line with how we use technology today,'' she said.

COMPETITIVE EDGE

If passed, telephone companies would avoid city regulations and could pick and choose where they want to provide service, said Steve Wilkerson, president of the Florida Cable Telecommunication Association in Tallahassee.

He said the current campaign to take power away from local governments is an effort by telephone companies to get a competitive edge on already-established cable providers.

If the local cable tax were eliminated, telephone companies would still have to pay local communication services taxes for telephone service, but not for revenues from cable subscribers. Cable companies would no longer have to pay the local tax, either.

Wilkerson thinks without local government control, telephone companies will avoid low-income areas and only target affluent and new developments as customers.



''They are dressing it up in the name of competition, but what they want is to get off the regulatory hook,'' he said. ``If you're going to have competition, it should not just benefit the upscale, affluent community. If we have to serve everybody, then they should, too.''

Telephone companies would run cable infrastructure on the lines they already use to serve customers and don't mind paying cities for using the right of way, said Ed Merlis, senior vice president for U.S. Telecom Association, a national organization that represents large telephone companies such as AT&T and Verizon.

He said the goal of the bills are to set a new regulatory standard for everyone, and not to get a free pass.

''If you think about the consumer, they are dying for choice and members of this industry have the means to reach into people's home and provide that choice,'' Merlis said. ``Standing in the way is a set of regulatory hurdles that were erected in an out-dated era.''

TAXPAYERS' BURDEN

Fort Lauderdale Mayor Jim Naugle agreed that eliminating franchise agreements would open the door to more competition, but contends it shouldn't happen at the expense of the taxpayers.

His city received $15.1 million in 2005 from the communications tax, but stands to lose about $1.5 million if cable companies don't have to pay the tax anymore.

''Over the years our ability to regulate cable has kind of eroded. They took away our ability to regulate rates and they went through the roof,'' Naugle said.

``They want to use our right of way, they should be paying for it. If we lose that revenue, it puts more pressure on property taxes.''


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