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July 25, 2023, 11:31 a.m.

Massachusetts lawmakers consider a tax on streaming services to help fund public access media

Massachusetts would be the first state to use fees on streaming services specifically to support community media.

Massachusetts lawmakers are considering legislation that advocates say would make it the first state in the nation to levy fees on streaming companies like Netflix in order to help fund community media.

The “Act to Modernize Funding For Community Media Programming” is proposing a 5% fee on digital streaming providers, based on a company’s gross annual revenue in the state. A portion of the fee would be distributed to municipalities for the support of their community media centers — colloquially known as public access television.

The proposed legislation, which is in the early stages of committee review in the state legislature, is aimed at supplementing decreasing cable revenue fees, which make up a large portion of community media budgets.

Under the federal Cable Communications Policy Act of 1984, cable providers currently pay a percentage (up to 5% of gross annual revenue) of their franchise license agreements with municipalities in exchange for using local infrastructure to reach customers. For nearly 40 years, these fees have represented a major source of funding for community access stations across the country that produce non-commercial public, educational, and governmental (PEG) programming. (Disclosure: The author serves as a volunteer member on the board of the nonprofit Watertown [Mass.] Cable Access Corp.)

But as consumers increasingly quit cable for streaming entertainment services, a major source of funding for community media is in jeopardy. At the same time, these stations are playing an increasingly vital role in a shrinking local news ecosystem, according to Jonathan Grabowski, the executive director of Marshfield Community Television and a clerk on the board of MassAccess, a nonprofit that advocates for community media.

“In an age of remote participation and a lack of local media coverage, community media centers in Massachusetts have found themselves in the untenable situation of increased demand for services with less funding,” Grabowski testified at a July 13 hearing on the bill.

Seventy percent of Mass Access’ member organizations reported a sharp increase in coverage of local meetings since 2020, to support hybrid open-public-meeting requirements during the pandemic, Grabowski testified, while nearly 60% reported a decrease in funding during the same time period. Citing figures from the Massachusetts Department of Telecommunications and Cable, he added that cable subscriptions have decreased by more than 30% in the state from their apex a decade ago, with the largest-ever decrease in subscribers — 10% — occurring between 2021 and 2022. At that pace, Grabowski warned, the $63.3 million in cable franchise fees that go to supporting Massachusetts’ community media centers will decrease by more than half by 2030.

The proposed legislation (H.74 and S.34), which has more than 70 cosponsors to date, would direct the state to collect fees from streaming companies twice per year into the general fund. Twenty percent would be retained for administrative costs, and the remaining 80% would be disbursed to municipalities, based on population, to be evenly split between the municipality and its community media station for “expenditures related to hybrid municipal meetings, data infrastructure improvements, school technology programs and more,” according to MassAccess.

At least a dozen states currently levy some kind of digital tax on streaming services, but Massachusetts would be the first state to earmark a portion of the fees specifically to support community media, according to David Gauthier, the president of MassAccess and the executive director of Winchester Community Access & Media. Massachusetts is leading the legislative push, according to Gauthier, because it is home to more than 200 — or 13% — of all the community media centers in the nation. According to MassAccess, Massachusetts, with a population of around 7 million people, has more stations than California and Texas, the only other two states to have more than 100 community media centers.

Keep reading at Nieman Reports »

Jakub Porzycki/NurPhoto via AP.

POSTED     July 25, 2023, 11:31 a.m.
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