Americans for Tax Reform Urges Colorado Legislators to Support the Telecommunications Modernization Act of 2012

by Guest | 11:42 am, March 16, 2012 | Comments Off

Guest post by Patrick Gleason

Today Americans for Tax Reform sent a letter to Colorado legislators in support of Senate Bill 157, the Telecommunications Modernization Act of 2012, which would phase out price controls and subsidies with the aim of lowering consumer and taxpayer costs, while leveling the playing field amongst service providers to enhance competition.

ATR president Grover Norquist spelled out the benefits of this legislation in a letter sent to Colorado senators today:

“SB 157 would gradually eliminate the state’s high cost support fund (HCSM), which subsidizes select phone carriers to the tune of over $60 million per year. Eliminating the fund will help to level the playing field while lowering phone bills for virtually all Colorado taxpayers, who ultimately bear the cost of the HCSM.

The measure also reduces intrastate access charges paid between carriers for originating and terminating phone calls. Access charges have the same economic effect has a hidden tax that raises costs for consumers and subsidizes some phone providers at the expense of their competitors. The bill would bring intrastate rates to parity with federal interstate charges, reflecting a switch from legacy circuit-switch networks to Internet-based communications that do not recognize state borders. Finally, recognizing that strengthened competition in the market brings lower consumer prices, SB 157 eliminates costly price controls placed on telecommunications services.

SB 157 recognizes increasing competition in the industry brought in part by a convergent drive toward Internet-based communications services. Today, phone, cable, satellite, and other multichannel video programming distributors offer increasingly similar services. The antiquated and costly regulations and subsidies of yesteryear’s market only serve to stifle innovation, create an unbalanced marketplace between competitors, and raise costs for Colorado taxpaying consumers.”

Simply put, Senate Bill 157 would reduce hidden taxes on carriers, resulting in lower phone bills for individuals, families and employers throughout the Rocky Mountain State. In the face of rising gas prices, the nine state tax hikes passed by lawmakers in Denver just 24 months ago, and the largest federal tax increase in history that is scheduled to hit in less than ten months, now more than ever, hardworking Colorado taxpayers need the relief that Senate Bill 157 would bring.

SB 157 has been referred to the Senate Business, Labor, and Technology Committee, which will hold a hearing on the bill next Monday, March 19. It’s time to bring Colorado’s antiquated communications regulatory and subsidy regime into the modern age. ATR encourages Colorado taxpayers to call their representatives in the legislature and urge them to do just that by supporting and voting “Aye” on SB 157.

Patrick Gleason is Director of State Affairs at Americans for Tax Reform

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