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Tech Week In Review: State Taxation of Streaming Services, AT&T and Verizon’s Rocky 5G Rollout & More

January 21, 2022

Cities, State Tax Collectors Target Streaming Services:

Local and state governments have been requiring cable TV companies to pay sales taxes and other taxes and fees – such as franchise fees for the easements that let them run cable in public rights-of-way – for decades. But Americans are increasingly pulling the plug on cable. Between 2015 and 2021, cable and satellite TV viewership declined from 76 percent to 56 percent, according to a survey by the Pew Research Center. The vast majority of those cord-cutters, 71 percent, switched to streaming services like Netflix and Hulu.

In an effort to recoup some of the revenue they’ve lost as a result of that migration, at least 33 of the 45 states that impose a general sales tax have incorporated streaming services into their existing sales tax structures. Delaware, which doesn’t levy a state sales tax, has subjected streaming services to its gross receipts tax. Florida requires streaming services to pay a communications services tax, like cable TV and cellphone service providers do, as well as the state sales tax.

At the local level, Chicago and a few other cities require streaming services to pay the amusement tax they impose on other forms of entertainment. And cities and towns in at least 13 states have filed lawsuits against Netflix and Hulu, seeking the franchise fees they believe they’re entitled to, since streaming services rely on the fiber-optic cable that runs beneath city streets. Cities in Georgia, Indiana and Missouri have had some early successes, but lawsuits in Arkansas, California, Nevada and Texas have been dismissed. (STATELINE)

Last-Minute Hitch in AT&T, Verizon 5G Expansion Plans:

Last week Verizon and AT&T switched on a new part of their 5G networks that use wavelengths called C-band to provide faster wireless service to a large part of the country. The rollout didn’t go entirely as planned, however, due to last-minute warnings from airline executives that the C-band launch might cause “catastrophic” travel and shipping disruptions. In response the wireless carriers voluntarily – but not happily – agreed to delay the activation of towers around some airports.

“At our sole discretion we have voluntarily agreed to temporarily defer turning on a limited number of towers around certain airport runways as we continue to work with the aviation industry and the [Federal Aviation Administration] to provide further information about our 5G deployment, since they have not utilized the two years they’ve had to responsibly plan for this deployment,” said an AT&T spokesperson.

Airlines reported only minor disruptions following the rollout. (CNBC, VERGE, INSURANCE JOURNAL, CNET)

Tech Competition Bill Advances in Congress:

On a bipartisan 16-6 vote last week, the U.S. Senate Judiciary Committee advanced the American Innovation and Choice Online Act, which had already received approval from the committee’s House counterpart. The legislation would prohibit dominant platforms from “self preferencing,” such as, for example, Apple and Google ranking their own apps higher in their app stores than apps from other developers. (CNBC)

US House Dems Go After Targeted Ads:

Democrats in the U.S. House have introduced a bill that would ban much of the targeted advertising relied on by Facebook and other tech companies. The Banning Surveillance Advertising Act would prohibit such companies from using personal data and protected class information, such as race, gender and religion, to target ads, as well as ban broad location targeting and contextual ads, which are matched to the content users engage with. (CNET)

Federal Merger Guidance Rewrite Coming:

In a joint statement last week, the Federal Trade Commission and the Department of Justice's antitrust division announced that they plan to rewrite their guidance for mergers, due to the concentration of U.S industries and surge in merger filings in recent years. The move could result in tougher antitrust enforcement for Big Tech companies like Amazon and Facebook. (CNET)

-- Compiled by KOREY CLARK

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