Broadband Cable Association of Pennsylvania


December 18, 2013

Lehighton Borough Council agreed to increase taxes just one mill this year. There are other things to consider about the budget, though, which make the cost to taxpayers greater than projected. The one mill increase comes atop a two-mill hike set only two years ago. In addition, the borough is adding a local services tax of $52, replacing the $10 occupational privilege tax. This means an additional $42 per year is coming out the pocket of each person who works in the borough.

On top of this, the council is considering adding a 5 percent cable tax. This would be applied to the local cable supplier, Blue Ridge Communications, which would then be passed onto consumers. The budget is expected to be adopted during a meeting of the council at 9:15 a.m. Friday in the Lehighton Municipal Building. The additional revenue is needed to pay for security measures in the municipal building, pay for a 9 percent increase in health insurance, and pay for additional costs in employee pension costs, explained Borough Manager Nicole Beckett. Lehighton is in a unique position. It owns its own electric distribution system. The Light and Power Company contributes hundreds of thousands of dollars to the general fund of the borough. So why, then, does the borough have to add three different tax increases this year: the millage hike, the services tax, and the cable tax?

The cable tax is the most unfair. It applies only to local cable TV subscribers, meaning Dish TV customers aren't affected. This is like owning a local store, having a hefty tax applied, while outside firms come in and have no taxes applied. The courts should look at the cable tax and make it illegal since it only applies to certain TV service providers. Here's another thing that Lehighton should consider regarding the cable tax. Blue Ridge Cable, which is the borough cable TV supplier, has its office and call center in Lehighton. Over 125 people are employed there for which the borough derives local services tax, real estate taxes, and other benefits. It's understandable that municipalities are having tough times with their budgets. But Lehighton is better off than most other communities.

Incidentally, besides the tax increases, remember that the borough's electric rates are higher than other electricity providers such as PPL Electric. Because the borough owns its own electric company, residents cannot shop for competitive rates like PPL customers can. Hopefully, the borough reviews its budget proposal before Friday and reconsiders the cable tax. It is not a fair or justifiable assessment. Lehighton Times News

The traditional phone system has been in place since 1876. But for businesses, it may be time to hang it up as the companies that provide those services move to all-wireless networks. "Cellphones and other mobile devices have completely changed the way that people communicate with one another," said Ashley Hause, communications manager of the San Diego Regional Chamber of Commerce. "Gone are the days where you need multiple devices to get work done. Today you can email, call, video chat and much more right from the device at your fingertips. The biggest difference is the accessibility and ease that today's cellphones provide. Put simply, land lines are inconvenient for most people."

For businesses, however, moving away from traditional fixed lines isn't so simple. There are many things to consider, including cost, security and digital communications failures like dropped calls and Internet outages. "While personal households may be steering away from land lines, I'm not sure that is the case with businesses," Hause said. "New technology may allow for business land lines to be better connected to personal phones or handheld devices, but I think businesses still use land lines as a way to track and receive voice mail messages from customers."

The Federal Communications Commission, however, has recognized that land lines are not as dependable as they used to be. Phone lines are deteriorating and technicians aren't being trained to work on them anymore. In early 2009, Congress directed the FCC to develop a National Broadband Plan to ensure every American has access to broadband capability. Many key phone companies are ready to move forward with the transition, including AT&T. "Our current infrastructure has served us well for almost a century, but it no longer meets the needs of America's consumers," said Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs. "The transition to broadband and IP (Internet Protocol) services that has already begun is driven by consumers who are moving to the Internet and choosing to connect in ways not imagined just a decade ago."

AT&T has petitioned the FCC for permission to start transitioning away from traditional switched-circuit phone systems and move certain areas to all-Internet and wireless. Consumers have already started transitioning. According to a 2012 study by the Centers for Disease Control, which was conducted to help the CDC with its data collection programs, about 52 percent of homes don't have or don't use land lines. Some companies have already chosen to ditch land lines. For instance. Ford Motor Co. has worked over the last several years to go wireless at its Detroit headquarters, even providing its staff with cellphones.

So what are the options for businesses as they move away from the traditional phone system? Two options are Voice Over Internet Phone (VoIP) and an all mobile system - both which have some downsides. VoIP services convert a voice into a digital signal that travels over the Internet. The FCC's website explains it this way: "If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination. VoIP can allow you to make a call directly from a computer, a special VoIP phone or a traditional phone connected to a special adapter."

At least 18 million households were using a VoIP service in 2010, according to the FCC, and it was estimated that by 2011 there would be as many as 45 million total VoIP subscribers. However, some businesses have stuck with land lines because VoIP services do not work during power outages or at other times when an Internet connection fails. Additionally, call quality is affected by the broadband connection. Another option for businesses is to go with all cellphones, but again, there are concerns about dropped calls and call quality. "A self-employed individual or a smaller firm may just use cellphones as a cost-saving measure, whereas larger companies have more employees that need land lines to conduct business," said Hause. San Diego Union-Tribune

After fighting over everything from arcane spectrum rules to telecom mergers, Dish Network Corp. and Sprint Corp are showing signs of becoming friends. Sprint, the No. 3 U.S. cellphone carrier by subscribers, and Dish, a satellite TV company, said Tuesday they will work together to test a fixed wireless broadband service in Corpus Christi, Texas, beginning in the middle of next year. Such systems use cellular networks to beam data traffic back and forth from antennas and transmitters attached to subscribers' houses. If viable, fixed wireless could be a way to help meet U.S. regulators' goal of providing fast Internet service in rural areas where it isn't economical for carriers to run fiber or hook up cable.

The pilot project is a tiny step in the context of the two companies' sprawling nationwide services. But it is a noteworthy sign of peace after a year in which Dish and Sprint sparred bitterly on several occasions. Last fall, Sprint lobbied the Federal Communications Commission for restrictions on spectrum owned by Dish. At the time, Dish was asking the agency to change rules to allow the company to use airwaves that had been reserved for satellites on a ground-based cellular network. Dish ultimately prevailed, adding billions of dollars in value for spectrum it had amassed for about $3 billion. At the time of the dispute, Dish Chairman Charlie Ergen described Sprint's position as "draconian."

Earlier this year, Dish and Sprint were at each other's throats in a bidding war over Clearwire Corp. Sprint, which ultimately won the contest, derided Dish's offer as "illusory." More recently, Dish lost out to Japan's SoftBank Corp. in a merger battle for Sprint. After the dust settled, Mr. Ergen said in August that "in an ironic sort of way" Sprint was "still an interesting potential partner for us." As a result of going through the full due diligence process with them, Mr. Ergen said, "we actually understand Sprint and Clearwire probably better than we do any of the other wireless providers." Mr. Ergen has spectrum and a desire to offer wireless service. But it lacks a network, which would be expensive and time consuming to build. One way around that would be to sign a contract to share an existing wireless carrier's infrastructure. Sprint has indicated it would be amenable to such an arrangement.

At an investor conference last month, Sprint Chief Financial Officer Joe Euteneuer said the company would be open to a network deal with Dish, adding there were "no bad feelings" between the two companies. The comments underscore the jockeying going on as the U.S. wireless industry consolidates around a few major carriers. Sprint is also working on a bid for rival T-Mobile US Inc. and could launch a bid in the first half of next year if it decides it can get the merger past regulators, people familiar with the matter have said.

The deal between Sprint and Dish that was announced Tuesday is far from a grand bargain, and it doesn't get Mr. Ergen anywhere nearer to his vision of bundling mobile video with high-speed wireless service, a potential offering that was at the heart of why he tried to buy Sprint and Clearwire earlier this year. In this trial with Sprint, Dish will handle marketing and customer installations. Broadband access will be carried over Sprint's network.

Dish has said it sees an opportunity to deploy fixed wireless broadband in more rural areas, where it doesn't compete with the speed of ultrafast fiber operators or cable broadband. But in metro areas, Dish wants to offer cellphone services. Sprint has abundant spectrum at a high frequency, known as 2.5 gigahertz, meaning it should be able to handle the heavy data traffic that usually comes with fixed broadband services, which customers typically use for desktop computers or Wi-Fi. Dish has dabbled previously in fixed wireless broadband with nTelos Holdings Corp. a small wireless provider. In October, Dish and nTelos said they would expand their trials in Virginia early next year, potentially reaching about 500,000 homes. Wall Street Journal