SENATE APPROVES INTERNET ACCESS TAX MORATORIUM
The Senate approved a new a moratorium on Internet access taxes at our deadline Thurs. A bipartisan group of senators beat back 2 unrelated amendments, then voted to head off a filibuster on an amendment by Senate Commerce Committee McCain (R-Ariz.) to the moratorium legislation. The Senate later approved McCain’s amendment by voice vote. Senators involved in the debate met after the cloture vote and worked out acceptable amendments to McCain’s amendment. Opponents to S-150, Sens. Alexander (R-Tenn.), Carper (D-Del.) and Voinovich (R-O.), chose not to offer their own bill, S-2084, as an amendment.
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Sen. Lott (R-Miss.) introduced the first amendment, which would extend to 4 years the grandfathering for states taxing before 1998. That would make it the same length as the extended moratorium. Lott worked with McCain on his compromise, and McCain urged passage of the Lott amendment. Sen. Dorgan (D-N.D.) said he didn’t object, and it was adopted by voice vote. Sen. Feinstein (D-Cal.) offered an amendment that would also extend the moratorium on states taxing DSL to 4 years, but she was vigorously opposed by Allen and his supporters. Her amendment was tabled, or killed, on a 59-37 vote. Passing by voice vote was an amendment by McCain to his own amendment. In negotiations with Dorgan and others, McCain agreed to modify his amendment to clarify that VoIP was exempt from the moratorium.
Another amendment adopted was by Sen. Lautenberg (D- N.J.). It called for a General Accounting Office (GAO) study on the impact of the legislation on states. McCain said such a study would be “very helpful” when the Senate begins debating the moratorium again prior to its expiration in 4 years, and he predicted that debate could begin as early as next year. Dorgan also supported it, and it passed by voice vote. McCain said he hoped Lautenberg would be a conferee on the bill and that he would fight to see that the GAO study survived conference.
There could have been more than 30 amendments offered, McCain said. It was McCain’s compromise amendment that achieved cloture, or closure of debate, with a 64-34 vote. Forty-six Republicans were joined by 18 Democrats in the vote to close debate and move forward on the legislation. Only 5 Republicans opposed cloture -- Alexander, Enzi (Wyo.), Cochran (Miss.), Hutchison (Tex.) and Voinovich. Twenty- eight Democrats were joined by Sen. Jeffords (I-Vt.) in opposing cloture.
Among the proposed amendments that weren’t considered: (1) Insertion of language related to the streamlined sales tax effort, by Sen. Graham (D-Fla.). (2) Language faulting the FCC for its broadband policy and calling for a broadband deployment trust fund, as well as a report on universal service, by Senate Commerce Committee ranking Democrat Hollings (S.C.). (3) A restoration of the expired moratorium, a limitation on taxation of taxes on advanced services, and an exclusion for VoIP, by Dorgan. (4) Creation of a “Corporate Subsidy Reform Commission” by Sen. Carper (D- Del.), who like Alexander calls S-150 a subsidy for the telecom industry. (5) A Sense of the Senate that S-150 violates the Unfunded Mandates Reform Act, also by Carper. (6) A broadband deployment tax credit, by Sen. Rockefeller (D-W.Va.) based on a bill he’s sponsored to that effect.
Before debate was closed on the McCain amendment, the Senate defeated efforts to close debate and move forward on 2 non-germane amendments, both designed to attach moribund energy legislation to the bill. The first effort by Senate Minority Leader Daschle (D-S.D.) failed 41-58, while a 2nd by Sen. Domenici (R-N.M.) went down 43-55. Any bill ultimately passed by the Senate would enter a conference with the House, which passed a bill similar to S-150, HR-49 by Rep. Cox (R- Cal.), last year.
The McCain amendment would extend the moratorium 4 years, ending the grandfathered states from 1998 after 3 years and the states currently taxing DSL after 2 years. The bill largely preserves the definition of Internet access added to S-150 during the markup in McCain’s committee. That definition is opposed by Alexander and other former governors now in the Senate who argue it could restrict collection of some telecom taxes. Alexander in a floor speech just prior to the cloture vote on the McCain amendment repeated his contention that the compromise doesn’t go far enough to protect states. While the McCain amendment is opposed by most S-2084 backers, it has won the support of Allen, Wyden and other S-150 cosponsors, who say it’s better than no legislation at all. McCain also has won the support of numerous trade groups who backed S-150. The Information Technology Industry Council Wed. wrote senators that it supported the McCain compromise, and would “score” several moratorium-related votes for its high-tech report card. BellSouth Vp-Governmental Affairs Herschel Abbott praised the successful cloture vote; his company has chosen to support the McCain amendment as well.