State and Local Government Authority Over Communications (1995, revised 2006) Fueled by new developments in cable, telephone, video and satellite broadcasting and the Internet, the communications industry is undergoing rapid technological, legal and economic change and growth. Proposals continue to be advanced to promote competition, encourage investment in the national information infrastructure and foster widespread service.
State and local governments, which strongly support access to reasonably priced technological advances, must guard against the unintended preemption of their Constitutional authority, including the power to regulate, tax, and collect franchise and other fees from communications providers that operate in their jurisdictions. State and local governments must retain these powers, regardless of the method of distribution of services, in a way that encourages the growth and diversity of the industry, and fosters state and local economic development, while at the same time assures state and local citizen and community control.
The Government Finance Officers Association (GFOA) supports federal communications reform initiatives that include:
- Preserving the right of state and local governments to manage their own public rights-of-way and to collect fees or fair market compensation for the use of public rights-of-way from communications providers without intervention from or preemption by federal authorities, including the right to collect differing fees from various communications providers. GFOA discourages the use of statewide or national franchising;
- Allowing local governments to negotiate franchise agreements directly with communications providers using the public rights-of-way and to regulate and administer the franchise process, including ensuring local government access to communications services and facilities as part of negotiated franchise agreements;
- Preserving state and local governments’ ability to enforce their land use and zoning authority;
- Ensuring that any communication tax modernization initiatives protect the interests of local governments, including ability of local governments to:
- Retain the authority to decide tax policy, including imposing taxes on providers of communications services,
- Maintain current revenue streams from communications taxes,
- Establish a broader tax base, which includes the ability to tax services not currently taxed such as satellite, internet access, voice over internet protocol and other services that may develop over time, and
- Ensure that any centralized collection of communications taxes (at the state level or by a third party administrator) includes adequate safeguards so that revenues will be remitted to the local governments and that local governments retain the ability to audit communications providers for failure to pay taxes;
- Safeguarding against Federal Communications Commission and congressional actions that would reduce local governments’ ability to collect revenues from communications services and providers;
- Ensuring the ability of local governments to provide their citizens with access to communications facilities and/or services, including community broadband systems;
- Supporting policies that promote universal and affordable access to communications services in states and localities, such as federal and state universal service funds and the E-rate program; and
- Ensuring that states and localities have sufficient spectrum and funding to obtain interference free, interoperable emergency communications.
GFOA urges the federal government to respect the legitimate interests of local governments and their residents as it debates and considers communications reform initiatives. GFOA encourages reform that retains essential local authority to determine tax and franchising policies that are consistent with local needs and maintain adequate revenue, and addresses citizen concerns about the community impact of and access to current and emerging communications technologies.
Recommended for GFOA membership approval by the GFOA’s Executive Board, February 24, 2006.
Adopted by GFOA membership May 9, 2006