The phone companies have been trying to convince state governments that cable should be taxed like telcos, and Qwest has found the phone industry’s best prospect for success in years in Utah, where several legislators appear sympathetic to the idea.
Qwest is arguing that it is simply fair to have the state tax every service provider, rather than have the state regulate only phone companies while local governments (cities or counties) get to regulate cable operators. Qwest is insisting that the only issue is parity: If both companies offer the same services, why are they being treated differently?
Of course, the issue is not just about parity, it’s about legal and regulatory practice, as Comcast has been pointing out. Telephony is regulated one way and VoIP another, because the former is a circuit-switched service and the latter is essentially an Internet service.
A state legislator, Rep. Wayne Harper, proposed a bill in the last Utah legislative session that would give Qwest what it wants, but Harper pulled the bill back pending further discussion.
Sensing an opportunity, however, Qwest on June 27 filed a petition with the Utah Tax Commission claiming economic disadvantage due to inequitable tax treatment.
The request is stirring the political waters in Utah. As the Tax Commission considered the petition, the Utah Senate Majority Leader Curtis Bramble and State Sen. Wayne Niederhauser, Senate chairman of the Revenue and Taxation Committee, sent a letter to the Tax Commission on August 8, insisting any rule changes were legislative matters, according to The Salt Lake Tribune (story here).
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