Comcast, Charter: No New Modem Taxes

New Orleans -- Leading cable operators are urging federal regulators to
refrain from applying new taxes to cable-modem services.

The MSOs, including Comcast Corp. and Charter Communications Inc., are
worried that the Federal Communications Commission for the first time is going
to take some cable-modem revenue and shift it to the program designed to keep
local dialtone service affordable for the poor and residents in high-cost

Comcast and Charter made their views known in comments filed with the FCC

Charter said it was especially troubled that the agency would tax cable-modem
revenue and provide it to phone companies that might use it to fund their
rollouts of digital-subscriber-line service in rural and high-cost areas.

'By imposing new assessments on the current leaders in deploying
consumer-level broadband, the FCC would reward the industry idlers for their
inaction in broadband deployment,' Charter said.

The FCC is conducting a rulemaking to determine whether facilities-based
providers of high-speed data, when classified as information-service providers,
should contribute to the phone-subsidy program, also called the
universal-service fund.

The FCC is concerned that the migration of broadband could drain USF funding
if data revenue is excluded.

Comcast told the FCC that extending the USF to cable data would be premature
because the agency is studying broadband regulation in numerous proceedings that
are many months from completion.

In addition, Comcast warned that the commission might run into legal trouble
extending the USF to cable operators but not to other providers of Internet
access, both narrowband and broadband.

Unless they provide traditional circuit-switched telephone service, cable
operators do not contribute to the USF. Cable operators that wire schools and
libraries to the Internet are eligible to receive USF funding.

When the FCC classified cable-modem service an
information service in March, many cable operators discontinued collecting
franchise fees from cable-modem subscribers.