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US Internet Access Tax Ban Moves A Step Closer

Lisa Ugur, Tax-news.com, London

17 May 2000

Following a forty minute debate yesterday in the House of Representatives, the controversial per-minute Internet access tax looks to be on its way out, with a move towards passing bill HR1291, otherwise known as the Internet Access Charge Prohibition Act of 1999.

The bill, which is sponsored by House Oversight and Investigations Subcommittee Chairman Fred Upton, would prevent the Federal Communications Commission (FCC) the US government agency charged with the regulation of interstate and international communications, from applying interstate access charges on Internet Service Providers.

With the massive upsurge in Internet usage, the issue of access charges has undoubtedly generated a huge amount of public interest. The access charges in question are those fees a long distance carrier pays to the originating and terminating local telephone companies over whose facilities a call has travelled. Since 1983, there has been an ongoing debate about whether ISPs - deemed as "enhanced service providers" under FCC rules - should be required to pay access charges, based on the contention that these companies use local networks in the same manner as long-distance carriers. In 1996, the telephone companies Pacific Bell, Bell Atlantic, US West and NYNEX reported to the FCC concerning the effects of Internet usage on their networks and arguing that the existing rate structure did not reflect the costs imposed on local telephone companies to support Internet access.

The legilative process to ban the imposition of Internet access tax is only just beginning, but it is clear that the ISPs will be celebrating at the news of their small victory in Washington. In today's Cyber-world, could they have really lost?

See related article:

Legislation opens doors for Net phone fees, New York Times, at

http://www.nytimes.com/cnet/CNET_0_4_1879118_00.html

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