Newspaper article THE JOURNAL RECORD

Telecommunications Access Concerns Rural Areas

Newspaper article THE JOURNAL RECORD

Telecommunications Access Concerns Rural Areas

Article excerpt

While firms such as Cox Cable are wiring homes in central Oklahoma with powerful DS3 lines that can carry a wide spectrum of voice and data while providing Internet access at the same time, the state should not forget its smaller communities, even though it is much more costly to serve them, a state lawmaker said.

"It's disenfranchising those towns, like Carnegie," Rep. Abe Deutschendorf, D-Lawton, told the House Revenue and Taxation Committee.

Deutschendorf believes that the swiftest and easiest way to provide more Oklahomans with telecommunications access is through a public/private collaboration piggy-backed on the state OneNet system.

"I think that might be the quickest way," he said. "We already have the infrastructure with OneNet."

Oklahoma City attorney Jim Walker said that Cox Cable has updated its infrastructure in many parts of its service area so that it can provide high-speed cable modems, high-speed data transmission and telephone service.

In an arrangement with AT&T, which recently purchased the cable firm TCI, Walker said, within six months or so about 80 percent of Oklahoma will be served by an arm of Cox Cable.

At the same time, Walker said there are isolated towns in Oklahoma to which it will never be cost-effective to build out.

Rep. Ron Langmacher, D-Carnegie, committee chair, said that perhaps the state could provide some type of tax incentives to companies willing to serve these communities.

The committee touched briefly on how to tax the various permutations of telecommunications. Traditional telephone companies are taxed centrally, at the state level, at a rate roughly twice that of services such as cable television.

Walker said the most equitable methodology would be to tax telephone services at the same rate, whoever offers them. He said that cable television, whose main competitors are businesses such as locally assessed video stores, should continue to be taxed at the county level.

The committee also discussed the thorny issue of taxation of Internet sales. Congress has placed a moratorium on state taxation in this area which various possible federal tax schemes are debated in Washington, D.C.

"Somebody's got to look at when to put a tax on it," said Deutschendorf.

With the speed at which Internet sales are growing, he said, in a few short years towns and states that rely on sales taxes for much of their revenues will feel the pinch from lost revenues.

Walker, who also chairs the Tax Committee of The State Chamber, said that when he chaired the Oklahoma Tax Commission the agency actually sent auditors to states where it was suspected sales were being made to Oklahoma residents which circumvented Oklahoma taxes.

Walker also said that Congress is looking into different means of subsidizing the states, in a form of revenue-sharing, for the revenues they lose to Internet sales, although a specific federal tax source has yet to be selected. …

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