Fighting for the Industry
Communications Services Tax
- Consumers of wireless and wired communications services in Florida pay a communications services tax on their monthly service. The Tax is composed of a state and local component but is uniformly applied to all communications services regardless of the method of technology used to deliver the services. There is one notable exception as under both state federal law, charges for internet access services are tax exempt. Florida treats all communications services in a similar fashion when applying any taxes or fees.
- In adopting the communications services tax, Florida took the national lead among states in merging all state and local taxes and fees on providers of communications services and simplifying the administration the tax. Customers can clearly identify on their monthly bills how much they pay in state and local communications services taxes. Providers can deal with one entity – the Florida Department of Revenue – in remitting the taxes. The department also is the sole authority for interpretations of what’s taxable and for conducting audits.
- Florida levies both a state and a local communications services tax which appear distinctly on the bottom of each customer’s monthly bill. The state portion of the tax funds both state general revenue needs as well as the state Public Education Capital Outlay Fund that is dedicated to building and maintains educational facilities in Florida. The local portion of the tax is returned to the local government in which the customer is located and is used for a variety of government needs. Video services delivered by satellite providers is subject to a separate state communications services tax that combines the state and local tax rates and is set under state law to be equitable to those taxes imposed on our video or cable services delivered by alternative technologies. The tax was effective for those communications services billed on or after October 1, 2001 and is governed by the provisions of Chapter 202, Florida Statutes. The Communications Services tax is administered by the Florida Department of Revenue.
- Reference: Chapter 202, Florida Statutes
- Reference: CST page on the Fl Dept. of Revenue Web site
Theft of Communications Services
- In Florida, it is estimated that there are over $1 Billion in lost revenues due to the unauthorized interception of communications services. This loss of revenue results in the loss of hundreds of millions of dollars in state and local tax revenues, which translates into less money for schools, roads, police and other public services.
- It is illegal in Florida to knowingly intercept, receive, decrypt, disrupt, transmit, retransmit, or acquire access to any communications services without being a paid subscriber. It is also unlawful to “assist others” in any such illegal access to services. The possession or use of any device to provide such unauthorized access is illegal, and the manufacture and sale of such devices is subject to still criminal penalties.
- Reference: s. 812.15, F.S.
Statewide Video or Cable Franchise
- In 2007, Florida became one of the leading states in reforming cable franchising laws. Historically, cable companies had negotiated local franchises based on city and county boundaries as separate service areas. These agreements were negotiated largely under federal law – and were for distinct and diverse periods of time. These negotiations often became very complex and resulted in litigation – with the customer the ultimate loser in terms of the increased cost of these local regulations.
- By moving to a state issued franchise with minimal criteria, Florida provided a predictable statewide regulatory structure for companies to provide state of the art services while ensuring customers access to specific public programming – such as education and government access channels – without micromanaging the day to day business operations and capital investments of the providers.
- Reference: Chapter 610, F.S.
Use of Public Rights of Way
- Communications services providers are authorized under state law to occupy and use state and local rights of way to install their infrastructure necessary to provide services. The Florida Department of Transportation oversees the use of the state rights of way, while the applicable city or county controls the use of their public rights of way.
- Florida law provides specific limitations on the rules and regulations that govern the use of public rights of way by communications services providers. Local governments cannot require the payment of any fees for the right to access or use the rights of way as that compensation is already calculated in the local communications services tax. Local governments may adopt ordinances to govern access and use of the rights of way within certain statutory parameters. Each communications services provider wishing to use an applicable local governments rights of way must follow these ordinances which typically cover items such as general registration information including contact information; posting of performance bonds and indemnity provisions in case of any damages; street closure provisions; and permitting and inspection requirements, with specific limits on permit fees, if any. Florida law is specific that local governments must treat all communications services providers the same and may not use their rights of way authority in any way that allows them to otherwise regulate the business or operations, including specifying the use of any technology.
- The relocation or removal of communications facilities in the state and local rights of way is also comprehensively covered under state law. In general, the state and local governments can request and require the relocation of lawfully located communications facilities in the rights of way when such facilities are unreasonably interfering with the safe use or maintenance of public roads or rail corridors or when necessary due to the construction of a new or improved roadway.
- Reference: Section 337.401 – 403, F.S.
Florida Underground Excavation Act – Call Before You Dig!
- Property owners and professional excavators are required under Florida law to “call before you dig” to allow time for communications services providers and utility companies to “mark or locate” their underground facilities to prevent damage and ultimately service outages.
- The Sunshine State One-Call of Florida, Inc. is a not for profit corporations established to oversee this process for communicating between those digging and those with underground lines. A board of directors composed of both excavators and owners and operators of underground communications and utility facilities, including water and sewer, maintain a system where notifications of underground work are provided to those with underground facilities providing a 48 hour time period for the marking or locating of such facilities. This process at no expense to the property owner or excavator, then allows safe excavation without risk of harm to the facilities.
- Reference: Chapter 556, F.S. and Sunshine State One Call.
Florida Public Service Commission – Regulation of Telecommunications Services
- Florida has a Public Service Commission (PSC) composed of 5 individuals appointed by the Governor and confirmed by the Florida Senate. The PSC has regulatory authority over a variety of utility companies, including telecommunications providers. Any entity offering 2-way voice communications services for hire in Florida must have a certificate issued by the PSC. The PSC has no authority over providers of cable or video services and is expressly prohibited from regulating any “broadband or information services” which would chiefly include internet access services.
- Incumbent local exchange providers (“ILECs”) are those traditional phone companies who prior to 1995 were granted monopoly service areas to provide phone service in Florida. No competing phone service providers were allowed under Florida until the Legislature “de-regulated” local telecommunications services in 1995 and set up a process for the PSC to issue statewide certificates for providing such services to competitive local exchange providers (“CLECs”). The federal government followed Florida’s lead in 1996 by amending and adopting a new national telecommunications regulator framework which authorized local phone competition around the country subject to each state’s specific laws.
- There is a very minimalistic regulatory criteria at the PSC to apply for and receive a CLEC operating certificate. This certificate then allows the entity to provide local phone services. The PSC retains minimal authority to regulate CLECs and ILECs as the preference is for the market place to regulate the prices, service offerings and customer service experience. The PSC does have the authority to regulate and arbitrate carrier to carrier disputes involving the exchange of network traffic and payments.
- Reference: Chapter 350 (general FPSC) and Chapter 364, F.S. (telecommunications)