105th Congress: Democratic Perspectives House Committee on Energy and Commerce Democrats Welcome Page
ADDITIONAL VIEWS
OF THE
HONORABLE JOHN D. DINGELL
H.R. 3849, the `Internet Tax Freedom Act,' unanimously passed the Committee on May 14, 1998. The bill was introduced only two days earlier and came before the Full Committee with amazing speed and a sense of deja vu. A different version, H.R. 1054, bore the same title and was approved by the Telecommunications Subcommittee last October. However, that bill contained several infirmities.
While I strongly supported the notion that Internet-based businesses should be treated in a fair and non-discriminatory way from a tax standpoint, the actual language of the original bill did not accomplish this result. Instead, it conferred substantial regulatory and tax benefits on Internet-related businesses, benefits not available to businesses providing identical services through other channels.
H.R. 3849 is a vastly improved bill. I commend Chairman Bliley, Representative Cox, and their respective staffs for their work with the Minority to achieve consensus on these issues. The tax moratorium is now limited to Internet access and online services, and existing State taxes are grandfathered.
One problem does remain, however. The grandfather for existing State taxes does not extend to similar taxes legally imposed by local government authorities. I hope that this was simply an oversight by the Committee, and that the grandfather provision was intended to cover existing laws enacted by local jurisdictions. Local laws are entitled to the same protection as laws enacted by any other level of government. I urge my colleagues to support this important modification when the bill comes before the House for consideration.
Another important improvement to H.R. 3849 is that it retains existing Federal and State authority to regulate telecommunications services that are provided in combination with Internet access. This approach preserves the Committee's longstanding bipartisan telecommunications policy to regulate (or not regulate) like services in a like manner. Whether telephone services are provided over copper wires, digital loops, circuit switches or Internet protocol, companies will be treated consistently under this bill.
Just as important, it means that this Committee's longstanding bipartisan commitment to Universal Service, i.e., ensuring affordable phone service is available for all Americans, also is solidly maintained into the future. If a company provides a telecommunications service, it will continue to be responsible under existing law to contribute to these support mechanisms no matter what conduit it uses to provide the service.
The changes made to H.R. 3849 are critical to maintaining the cohesive nature of our Nation's telecommunications policies. While we may feel protective of the Internet as we would a newborn child, not wanting to stifle its growth in any way, we must also be responsible enough to see the long term consequences of a complete hands-off approach. I believe H.R. 3849 now strikes the correct balance.
JOHN D. DINGELL.
105th Congress: Democratic Perspectives
House Committee on Energy and Commerce Democrats Welcome Page