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A Bright Day for the Future of the Internet?

July 15, 2014

This article was originally posted on MaderyBridge.com

This morning the US House of Representatives will debate H.R. 3086, the Permanent Internet Tax Freedom Act. The Act would permanently protect consumers from the increased costs in accessing and using the Internet by extending the moratorium on Internet access taxes, and would also prevent the multiple and discriminatory taxation of Internet sales.

The House legislation enjoys huge support as evidenced by the scores of co-sponsors, enough to pass the legislation easily. That is a good thing, as time to pass the measure is of the essence because the moratorium will expire on November 1 of this year. If allowed to expire, states and localities would begin to collect taxes on Internet access, or apply other discriminatory taxes that may already be in place but which have been held at bay during the moratorium. Other states would also begin passing various new tax laws that discriminate against the Internet and Internet commerce, just as a means to raise more revenue, regardless of whether it is a discriminatory action.

And the impact of such action would not go unnoticed. Scott Mackey, former chief economist for the National Conference of State Legislatures and currently a consultant to the wireless industry, has estimated that an average household’s taxes would increase by $50 to $75 a year if states decide to apply their sales or telecommunications taxes to Internet access. While that doesn’t seem like much, think of those who already struggle to pay for broadband connections, such as the 1.2 million people served by Comcast’s Internet Essentials program designed to be accessible to low income homes.

In addition to the new taxes, failure to pass the permanent moratorium will result in increased costs to broadband providers, costs that ultimately show up in broadband service bills, paid by consumers. If Congress fails to act, or otherwise plays games with the moratorium, telecommunications providers would need to prepare to collect the new taxes, raising their expenses for administration and compliance.

The Senate version of the bill has 50 co-sponsors. So, a positive vote out of the House today will hopefully lead to a positive vote from the Senate before August. With such overwhelming support there is no justifiable reason to attach extraneous ideas to this simple idea, or to do anything to slow its passage. Doing so would only demonstrate the non-serious nature of those who slowed passage or distracted from the debate about online discriminatory treatment.

Today should be a great day for the Internet, one with several more to follow.