NAB, Lawmakers Irked by Clinton's Tax Plan

Eric Glick

A Clinton administration plan to raise revenue by taxing broadcasters met much criticism last week, as lawmakers and broadcasters gave the idea a resounding thumbs-down.

The plan, which calls for broadcasters to kick in $200 million for the fiscal budget for 2000, came as part of Clinton's package to help fund public safety agencies, among other things. If all local TV stations were to kick in an equal share, each would pay about $133,000 to the FCC in the form of a tax.

Under the proposal, which would need Congress' approval, the FCC would collect no later than Sept. 30, 2000, $100 million for federal, state and local governments' safety needs. The U.S. Department of Justice would get $80 million for "narrowband" communications. And the remaining $20 would be divided between the U.S. Treasury Department and the Bureau of Indian Affairs.

The plan is controversial on a number of fronts. Broadcasters don't like it because they've never had to pay for use of the airwaves before and they say the move would interfere with the transition to digital TV, which is already expensive, with costs mounting each day.

Eddie Fritts, the president-CEO of the National Association of Broadcasters issued a statement Feb. 1 saying Clinton's plan "would jeopardize a public-private partnership between government and free, over-the-air local broadcasters that dates back to the 1934 Communications Act."

Fritts said broadcasters already "provide community interest and public service programming in exchange for a small slice of the spectrum."

According to the NAB, broadcasters provided about $6.8 billion in public service programming and fundraising last year. To suggest that $6.8 billion is inadequate "for use of a sliver of spectrum is nothing short of sheer folly," Fritts said.

U.S. Sen. John McCain (R-Ariz.), the chairman of the Senate Commerce Committee who was critical of allowing broadcasters to receive free spectrum for digital services, said, "'Spectrum lease fee' is an alias for 'business tax,' and business taxes should never be carelessly imposed."

McCain said if government agencies and private corporations need spectrum, "it should be put on the auction bloc and made available."

He also said the move would slow the conversion to digital.