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IN THE OREGON TAX COURT REGULAR DIVISION Property Tax COMCAST CORPORATION, Plaintiff, v. DEPARTMENT OF REVENUE, State of Oregon, Defendant. ) ) ) TC 4909 ) ) ) ) ) ) OPINION I. INTRODUCTION This matter is before the court after a trial. The question is the propriety of the actions of Defendant (the department) in assessing Plaintiff (Comcast) under ORS 308.505 to ORS 308.665 (the central assessment statutes)1 in respect of property employed by Comcast in cable television and internet access businesses.2 II. FACTS Although substantial time was spent in the trial for the apparent purpose of establishing certain facts, the relevant facts are relatively few in number: 1. 2. The property in question is owned by one or more corporations in a family of companies that will be referred to as Comcast. (Transcript at 389-90.) The property consists of certain real properties, tangible personal properties and intangible personal properties. (Transcript at 14.)

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Unless otherwise noted, all references to the Oregon Revised Statutes (ORS) are to 2009.

The Comcast group of companies consists of several separate corporations and business entities. That corporate structure is not particularly relevant as the central assessment statutes address both ownership and use of property.

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Through the use of these properties Comcast engages in three businesses: a cable television business, an internet access business and a voice over internet (VOIP) business. (Transcript at 137.) Many of the major tangible personal properties and real properties are used in some way in all three businesses. Assets used in the VOIP business have been reported and assessed under the central assessment statutes. (Transcript at 393.) Measured by number of customers, revenues and capacity of bandwidth used, the cable television business is by far the dominant business operation in which the property in question is used. The primary use of the assets in question in this case is in the cable television business. (Transcript at 60.) As to the cable television business, the content transmitted to the customers of Comcast is either owned by Comcast or Comcast obtains the rights to transmit that content to its customers. Very substantial payments are made in respect of such rights to transmit the content produced or owned by others. (Defs Exs CCC at 6; DDDD at 4.) Although much, if not most, of the communication between Comcast and its customers in the cable television business is a one way communication from Comcast to the customer, there are interactive features in that relationship in which the customer communicates with Comcast. Those features are, however, secondary in that they exist to facilitate the primary activity of communication from Comcast to the customer. (Transcript at 930-32.) The cable television business and the internet access business each involve the communication of data. (Transcript at 925.) The internet access business of Comcast involves facilitation of data transmission from or to a customer. That data is data belonging to the customer of Comcast or data belonging to some third party, or data as to which the right to transmit has been acquired by the customer of Comcast or the third party. (Transcript at 759.)

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Certain other facts will be discussed where appropriate in the analysis of the issue in this case. 3

The department places significant emphasis on descriptions of Comcasts cable and internet businesses contained in internal and external publications of Comcast. (Defs Post-Trial Br at 6-20.) The court finds that these publications are not controlling as to the facts of this case. The department would not be bound by taxpayer characterizations of properties or activities if such characterizations would tend to prejudice the department. The department likewise cannot conclusively rely on such characterizations to its advantage.

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III. ISSUE The issue in this case is the propriety of the actions of the department in subjecting Comcast and the properties it employs in the cable television and internet access businesses to the central assessment regime of ORS 308.505 to ORS 308.665. IV. ANALYSIS ORS 308.515(1) provides in relevant part: "(1) The Department of Revenue shall make an annual assessment of any property that has a situs in this state and that, except as provided in subsection (3) of this section, is used or held for future use by any company in performing or maintaining any of the following businesses or services or in selling any of the following commodities, whether in domestic or interstate commerce or in any combination of domestic and interstate commerce, and whether mutually or for hire, sale or consumption by other persons: "*****" "(h) Communication." ORS 308.505(3) provides: ",,Communication includes telephone communication and data transmission services by whatever means provided." The stated definition of "communication" and the inclusion within that definition of "data transmission by whatever means provided" was added to the statute in 1973. See Or Laws 1973, ch 102,

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