S 2084 Talking Points

February 12, 2004

S.150 = PERMANENT CONFUSION
ALEXANDER-CARPER = A SENSIBLE SOLUTION

First Do No Harm – S. 150 does not simply extend the existing moratorium on Internet access taxes or tweak it to accommodate emerging technologies. Instead, S. 150 dramatically expands the existing moratorium to provide a huge tax giveaway to the telecommunications industry, at the expense of state and local taxpayers, small businesses and working families. Such a costly move to reward a special interest in Washington by preempting state and local authority should not happen, period. It certainly should not be made permanent law.

When the Sands are Shifting, Don’t Set Anything in Stone – Over the next several years, many technologies will be migrating to the Internet – including phone service, music, and movies. S. 150 enshrines a controversial, confusing and much wider new definition of Internet access in permanent law. In contrast, the Alexander-Carper bill sticks closer to the definition of Internet access in prior law and requires Congress to revisit the issue in two years. This will give Congress the opportunity to assess emerging trends in technology and, once these trends have established themselves more firmly, craft sensible and sustainable rules for this critical sector of the American economy.

Provide Certainty – CBO has said that, due to questions about how the new definition in S. 150 will be interpreted, it cannot estimate the losses to states and localities, except to say “we believe they could grow to be large.” CBO predicts that how the definition in S. 150 will finally be interpreted and what impact it will prove to have for states and localities, “might ultimately have to be resolved in the courts.” Alexander-Carper sticks closely to established rules and definitions, providing clear protections for consumers and quantifiable consequences for states and localities.
Extend the Existing Ban on Internet Access Taxes – The usual political rhetoric aside, the Alexander-Carper bill does not allow for taxes on email or Internet access. The Alexander-Carper bill provides for a two-year extension of the current Internet Tax Moratorium, including its ban on Internet access taxes, as well as its ban on multiple and discriminatory taxes.

Provide a Level Playing Field for Competing Technologies – The Alexander-Carper bill expands the current moratorium, but only to the extent necessary to provide equitable, tax-free treatment to all means of accessing the Internet. Alexander-Carper makes all transmission lines connecting consumers and Internet access providers tax-free. This ensures that Digital Subscriber Line (DSL) Internet access is treated the same as cable modem access.