New Maneuvers on Internet Access Ban
Debate on the Internet access tax moratorium
continued Tuesday afternoon in the United States Senate with
compromise seemingly as elusive as it has been for the last five
months since the original federal tax ban on Internet
connections lapsed on Nov. 1.
Senators George Allen (R-Va.) and Ron Wyden
(D-Ore.) introduced legislation almost a year ago to permanently
ban Internet access taxes and to expand the definitions of
access to include DSL and cable modem connections. The House of
Representatives overwhelmingly passed similar legislation last
year.
Both bills also phase out a grandfather clause
for the 10 states already taxing access in 1998, when the first
moratorium was passed by Congress. The Senate version has run
into staunch opposition from lawmakers, particularly those from
the grand-fathered states, who fear the revenue loss to state
and local authorities.
"We are here debating this measure because the
two opposing sides will not budge from their positions," Sen.
John McCain (R-Ariz.) said as he introduced a compromise
amendment calling for a four-year ban on access taxes. "Under
this amendment, an overwhelming amount of state and local taxes
will be protected."
Sen. Lamar Alexander (R.-Tenn.), who has led the
opposition, wasn't convinced.
"The definitions [in the McCain amendment] of
Internet access are the same as in the Allen-Wyden bill," said
Alexander, who is supporting an amendment to keep a new ban
limited to two years and narrow in scope.
By late Tuesday afternoon, the McCain amendment
was still awaiting a vote while Alexander and others engaged in
parliamentary maneuvers to delay consideration of the
legislation. Senate Majority Leader Bill Frist (R.-Tenn.) has
set a Thursday night deadline for the Senate to deal with the
matter.
At press time, the Senate had tabled a motion by
Texas Republican Kay Bailey Hutchinson and was considering an
energy amendment attached to the McCain measure by Senate
Minority Leader Tom Daschle (D.-SD).
"I urge my colleagues to not make this bill a
punching bag. It'll show we can't get anything done," Sen. Trent
Lott (R.-Miss.) said. "Senators can dump their out baskets on
this bill "that is their right" but we need to get this bill
done. Lets not attach amendments that are not germane to the
substantive part of the bill."
The original moratorium specifically covered
dial-up connections but was vague about other types of
connections. As Alexander said Monday, "In 1998 when the
moratorium was passed, I'd be willing to bet no one in the
United States Senate knew what high-speed Internet access
meant."
Even when the access tax moratorium was in place,
some state and local authorities began taxing DSL, the broadband
service offered by incumbent telephone companies. Cable
broadband connections have been beyond the reach of state and
local tax boards since the Federal Communications Commission
ruled cable modems were an information service and not subject
to the same regulations as telecommunications services such
Verizon and Bell South.
That decision was called into question last
October when a federal appeals court ruled the FCC erred in its
ruling and that cable modems did have a telecommunications
factor to it. Both the House version and Allen's bill would
exempt both DSL and cable broadband connections from access
taxes.
