Not Comcastic enough for Oregon —

Comcast can’t get “gigabit” tax break that was created for Google Fiber

Oregon overturns previous ruling, potentially costing Comcast millions.

A Comcast/NBC logo.

Comcast has hit a roadblock in its attempt to get a big tax break that Oregon legislators wrote specifically for Google Fiber.

It looked like Comcast had won a few months ago when Oregon's Public Utility Commission ruled 3-0 that Comcast's gigabit service qualifies the company for the tax exemption. But the exemption still needed to be certified by the state Department of Revenue, and last week the department refused to do so.

The department "ruled Comcast ineligible for the tax break, at least for this year," The Oregonian reported. "The department declined to disclose its reasoning, citing taxpayer confidentiality, and referred questions to Comcast. Comcast said any information would have to come from the Revenue Department."

When contacted by Ars, Comcast said it was disappointed in the decision. "The ruling conflicts with state law and has sent a message to the business community that significant investments, which were encouraged by the legislature, will not be honored by them," a Comcast spokesperson said.

Comcast can appeal to the director of the Department of Revenue, The Oregonian article said. Comcast did not tell Ars whether it plans to appeal.

The new tax law created last year exempts companies that offer gigabit Internet service from an unusual property tax that applies to data-transmission services and uses a "central assessment" to tax a company's property based on such nebulous factors as the value of its brand. Local government officials who tried to block Comcast from getting the tax break have said there are tens of millions of dollars on the line, money used to fund schools, libraries, and other government services.

Lawmakers designed the tax break to benefit Google Fiber, which is considering an expansion into the Portland metro area. Google's gigabit Internet service costs $70 a month, while Comcast is now offering symmetrical 2Gbps service over fiber for $300 a month, with $1,000 in startup fees. Rep. Phil Barnhart (D-Eugene) told utility regulators in March that lawmakers didn't intend for the tax break to be given to companies charging prices as high as Comcast's. But the Public Utility Commission ruled that the law as written did not exclude Comcast's 2Gbps fiber-to-the-home service, a ruling the Department of Revenue overturned last week.

Comcast has also begun offering a gigabit cable service for $70 a month, but it isn't available in Oregon yet and it offers only 35Mbps upload speeds. The Oregon tax law only applies to services with gigabit speeds both upstream and downstream, effectively limiting it to fiber networks.

In a separate matter, Comcast has also been fighting to avoid paying a license fee to the city of Eugene. But on Thursday, "the Oregon Supreme Court unanimously upheld an appeals court ruling in favor of the city," The Oregonian article said.

Channel Ars Technica