WASHINGTON, D.C. – Senator Ted Stevens (R-Alaska), Vice Chairman of the Senate Commerce, Science, and Transportation Committee, today made the following remarks on the floor of the Senate in favor of extending the Internet tax moratorium.

 

Senator Stevens: Since its inception, the Internet has provided a powerful economic boost to our nation, especially in rural areas.  It has become an important everyday tool for millions of Americans, a valuable educational resource, and a powerful mechanism for communication. 

 

To ensure the Internet’s benefits are available to as many people as possible, Congress should reduce obstacles to broadband access.  One way to accomplish this goal is to prevent taxes from being imposed on Internet access, because such taxes will only drive up the overall cost of the use of the Internet.

 

The Internet Tax Freedom Act, first passed by Congress in 1998, established a moratorium on state and local governments’ ability to tax Internet access.  Extended in 2004, that moratorium will expire on November 1st – less than two months from today. 

 

Legislation has been introduced in both the House and Senate to extend the Internet tax moratorium.  I have been supportive of such legislation and expressed support when the Senate Commerce Committee explored the issue at a hearing on May 23^rd of this year. Our Chairman, Senator Inouye, has been very supportive of the concept of keeping new taxes off the Internet.

 

Tremendous investment, growth, and innovation in broadband deployment have occurred since the moratorium was first adopted. In order for this progress to continue, Congress should extend the Internet tax moratorium before it expires this fall. 

 

If it is not extended by November 1st, more states could take the opportunity to quickly pass laws and impose new taxes on the Internet.  Such taxes would only serve to expand the digital divide between those who can afford broadband access and those who cannot.

 

The Internet has allowed states such as Alaska to compete on a more level playing field.  Alaskans are now able to market their goods to customers in the Lower 48 and around the world, which is especially beneficial for small businesses located in remote areas.  Improved broadband access has also eliminated distance barriers for education and medicine, providing rural areas with a higher quality of life. 

 

Faster, cheaper Internet access also helps drive America’s economic engine and creates new jobs. Continued broadband deployment will help ensure America keeps this competitive edge.  Without it, our nation will fall behind in the global economy.  If discriminatory taxes are imposed on Internet access, our country will face a real danger, and the rest of the world will no longer look to the United States for Internet innovations. 

 

The date the Internet tax moratorium is set to expire – November 1^st – is fast approaching.  It is my hope Congress will act to extend this important moratorium before that deadline arrives.  

 

While the expiration of the Internet Tax Moratorium is the most pressing broadband issue before Congress right now, several more issues should also be addressed to encourage greater broadband deployment and availability in this country.  First and foremost, universal service should be updated so that rural America has the same broadband opportunities as the rest of America.  This will require the work of both Congress and the Federal Communications Commission. 

 

Additionally, the government should try to stay away from doing things that would reverse the recent policy trends of encouraging broadband deployment through free market principles.