Technological Change and the Communications Marketplace: Challenges for State Tax Policy
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1 Technological Change and the Communications Marketplace: Challenges for State Tax Policy National Conference of State Legislators Executive Committee Task Force on State and Local Taxation August 11, 2013 Deborah Bierbaum, Executive Director External Tax Policy, AT&T Voice: Rick Cimerman, Vice President External & State Affairs, NCTA Voice:
2 The Online World Stats for Billion Facebook Users 634 Million Websites 4.3 Billion Accounts 175 Million Tweets/day 4 Billion Hours Video Playbacks on YouTube/day 58 photos uploaded/ second to Instagram 187 Million LinkedIn Users 2.4 Billion Internet Users Worldwide 5 Billion Mobile Broadband Subscriptions 144 Billion s Sent/day 16/internet-2012-in-numbers/ D/ict/material/FactsFigures2010.pdf 2
3 Cutting the Cord Wireless Substitution More than one-third of American homes (35.8%) had only wireless telephones during the first half of 2012 an increase of 1.8 percentage points since the second half of Preliminary results January June 2012 National Health Interview Survey (NHIS). 3
4 Mobile Video Will Generate Over 66 Percent of Mobile Data Traffic by
5 Cutting the TV Cord A Growing Trend The number of U.S. households that use Broadband for TV viewing in addition to Over-the-Air TV has risen from 2,010,000 in 2007 to 5,010,000 in 2013, now representing slightly less than 5% of total households. Almost 50% of these homes are under the age of 35 67% of these homes get their content through non-traditional services or devices They stream video twice as much as the general population and watch half as much TV. 48% of these homes watch TV content through subscription services. (Hulu Plus, Netflix, etc.) Source: Neilsen Zero-TV Survey, 4Q2012. Download full report at: 5
6 The Changing Video Marketplace 1992 THEN & NOW % CABLE % OF ALL MVPD HOMES 53% VERTICAL INTEGRATION (% OF NATIONAL CABLE NETS THAT ARE PART OWNED BY CABLE OPS) 55% 14% 101 TOTAL CABLE CHANNELS OVER 900 NONE TOP 10 MVPDS THAT ARE NOT CABLE COMPANIES 61% %OF ALL TV HOUSEHOLDS THAT ARE PAY TV HHS DirectTV #2 DISH #3 Verizon FiOS #5 AT&T U-Verse #6 86% 39% % OF ALL TV HOUSEHODS OVER-THE-AIR 10% Source: FCC 15 th Report 6
7 What the Internet Does Provides a value-added platform to deliver content and services at lower cost to consumers. Distributed Data Distributed Text Distributed Content: www Distributed Voice Distributed Video Instant messaging Music Software distribution VoIP phone calling Chat Distance learning Medical consultation Text messaging E-collaboration/ e-work Blogs Retail Sales Public information Games Books Audio conferencing Answering services Record and send Remote monitoring Video conferencing Video distribution 7
8 Skype TeleGeography estimates that cross-border Skype-to-Skype calls (44 percent in 2012, to 167 billion minutes. TeleGeography estimates that Skype added 51 billion minutes of international traffic in 2012 more than twice as much as all the telephone companies in the world, combined. Increase in International Phone and Skype Traffic, Source: earch-services/telegeography-reportdatabase/0003/6770/tg_executive_summary.pdf 8
9 In August of 2009, Hulu had More Viewers than Time Warner Cable Pascal-Emmanuel Gobry October 06, 2011 Hulu Plus is very successful, writes Hulu CEO Jason Kilar. It has now 1 million paying subscribers, and Kilar believes it will soon bring in half of Hulu's revenue. Throughout 2011, Hulu increased content on the free Hulu site by 40 percent and increased content on the subscription service Hulu Plus by 105 percent compared with what was available in For a description of Hulu s history, see FCC 15th Report. Source: 28/tech/ _1_hulu-video-platform-time-warner-cable 9
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