Comcast 2014 Annual Report Download - page 27

Table of Contents
Universal Service
A federal program known as the Universal Service program generally requires telecommunications service providers to pay a fee
based on revenue from their services into a fund used to subsidize the provision of telecommunications services in high-
cost areas
and to low-
income consumers and the provision of Internet and telecommunications services to schools, libraries and certain health
care providers. Some states also have analogous programs that support service in high-cost areas or to low-income consumers.
The FCC issued an order in 2011 that changed the way that a majority of Universal Service funds are allocated and began
implementing that order in 2012. By focusing on broadband and wireless deployment, and moving away from supporting traditional
telephone service, the changes could assist some of our competitors in more effectively competing with our service offerings, while
others could receive less funding. The actual impact of the changes is not yet known. The FCC’
s ruling has been upheld by a
federal court, but that decision has now been appealed to the Supreme Court of the United States.
In July 2014, the FCC released an order substantially revising the program to support services to schools and libraries. Under the
new rules, support will be shifted from voice services and other legacy services to broadband service and to the deployment of Wi-
Fi networks. In December 2014, the FCC adopted an order increasing the budget for, and making additional changes to, the
schools and libraries program. We cannot predict how these changes will affect our businesses.
The FCC has a long-
pending proceeding to reform the mechanism used to collect the fees used to fund federal universal service
programs. Proposals in that proceeding have included changing the basis on which the fee is calculated from revenue to a per-
user
fee or per-
connection fee; adopting a fee based on bandwidth; or expanding the services subject to the fee to include broadband
Internet access. In August 2014, the FCC referred the question of how to reform universal service fees to the Federal-
State Joint
Board on Universal Service, which is expected to make a recommendation in April 2015. In announcing certain aspects of his
proposed open Internet order, the FCC Chairman stated that his proposed order would not impose universal service fees on
broadband Internet access services. We are unable to predict the outcome of these proceedings and whether they will affect our
business.
Other Regulations
State and Local Taxes
Some states and localities have imposed or are considering imposing new or additional taxes or fees on the cable services we
offer, or imposing adverse methodologies by which taxes or fees are computed. These include combined reporting or other
changes to general business taxes, central assessments for property tax, and taxes and fees on video, high-
speed Internet and
voice services. Cable industry members are challenging certain of these taxes through administrative and court proceedings. In
addition, in some situations our DBS competitors and other competitors that deliver their services over a high-
speed Internet
connection do not face similar state tax and fee burdens. Congress has also considered, and may consider again, proposals to bar
states from imposing taxes on DBS providers that are equivalent to the taxes or fees that we pay. Congress may not extend the
Internet Tax Freedom Act, which prohibits most states and localities from imposing taxes on Internet access charges. Additionally,
the FCC may impose Title II regulation on Internet access service, which may cause, directly or indirectly, some states and
localities to impose additional taxes and fees on our high-speed Internet business.
Comcast 2014 Annual Report on Form 10
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