LD 920 proposes to raise taxes and fees on critical business services

On Tuesday, April 6, Ben Gilman, general counsel for the Maine State Chamber of Commerce, delivered testimony before the Joint Standing Committee on Energy, Utilities and Technology in opposition to LD 920, An Act to Promote Oversight of and Competitive Parity among Video Service Providers.

Senator Lawrence, Representative Berry, members of the Joint Standing Committee on Energy, Utilities and Technology: my name is Ben Gilman from Gorham, and I represent the Maine State Chamber of Commerce, a statewide business organization made up of both large and small businesses. I am here to provide you with our testimony in opposition to LD 920, An Act To Promote Oversight of and Competitive Parity among Video Service Providers.

The Maine State Chamber of Commerce opposes LD 920 because the Act proposes to raise taxes and fees on critical services businesses depend on every day, as they seek to emerge from the economic calamity of the pandemic, while worsening the tax and fee disparity for companies with substantial investments in Maine. Further, the Chamber is concerned that this Act raises the same issues that are already the source of ongoing litigation and that increased investment in a declining method of connecting citizens with community raises valid questions.

Maine’s businesses are just now trying to emerge from unprecedented economic challenges. Now is not the right time to increase the cost of key services by 5% or more. For many thousands of Maine businesses, offering customers access to sports and other entertainment services is a key part of offering a great customer experience. Ironically, these are the very businesses most harmed by the COVID-19 pandemic and related restrictions. Our lodging and restaurant businesses do not need what amounts to a tax increase right now. We are doubly concerned that the definitions in Section 5 of the Act are poorly crafted, and that many other critical services from streaming music services and gaming to critical communications services are included. A 5% increase on businesses bills may only be the beginning of the additional costs related to LD 920.

The Chamber supports tax, fee and regulatory policies which strive for parity and treat competitors fairly while not favoring one competitor over another. Ironically, LD 920 worsens existing disparities, while at the same time increasing costs and regulations on companies that are investing in key infrastructure, which Maine needs to be competitive. The contrast is striking – the customer of a traditional video provider pays as much as 12% to 15% more because of state and local taxes and fees for services that are increasingly indistinguishable from streaming services.

More broadly, while the bill expresses an intent to help level the playing field among video service providers at a time when competition in the marketplace for video services has never been greater. The Legislature should instead be guided by forward-looking policies that seek to preserve cable television as a viable choice for Maine consumers, and not stifle it through additional heavy-handed regulation like this bill would impose.

The COVID-19 pandemic has taught us many lessons, one of which is that simple, easy to use, high-quality, two-way communications have revolutionized the way we interact with our government. We are using these platforms for this hearing today to interact directly with our elected officials in a transparent, real time, and two-way experience. These services are broadly available for free or at low cost and are interoperable and useable on virtually any internet connected device. These services are substantially more accessible and flexible for Maine’s citizens than the public access television channels.

Traditional cable television is in decline with some estimates suggesting that a mere 40% of households subscribe, whereas broadband penetration approaches 80% and cellular phone ownership more than 90% in many communities. Whether and to what extant millions of dollars should continue to be invested in public access is a valid policy question.

Lastly, LD 920 raises similar questions of preemption and conflict with federal law, which are currently the focus of litigation. Various sections of the Act are plainly inconsistent with federal law and would certainly lead to similar litigation, directly contradicting the statute’s stated purpose of avoiding the costs and uncertainty associated with such legal challenges. While the merits of the litigant’s arguments are yet to be decided, we should all be able to agree that the costs and distraction of more litigation benefits no one.

Thank you for your consideration, I would be happy to answer any questions the committee may have.

For more information, please contact Ben Gilman by calling (207) 623-4568, ext. 108, or by emailing bgilman@mainechamber.org.