WASHINGTON-Senate Commerce Committee Chairman John McCain (R-Ariz.) will oppose a universal-service proposal endorsed by the Personal Communications Industry Association last week that would earmark half of the 3-percent telephone service excise tax for discounted school and library Internet connections.
Pia Pialorsi, a committee spokeswoman, said McCain publicly could declare his opposition to the legislative proposal as early as this week. Pialorsi said McCain believes it makes little sense to use a regressive tax to help pay for a congressionally mandated Internet program that he and other Republicans believe has been subverted by the Democratic-led Federal Communications Commission for political reasons.
Vice President Gore, the top prospect for the Democratic presidential nomination in 2000, has promised to connect all schools, libraries and hospitals to the Internet by that year.
So loud and unrelenting has been the criticism from Capitol Hill and consumer groups, however, that the FCC was forced to drastically curb the schools and library Internet program just more than a week ago.
Without McCain’s support, Rep. Billy Tauzin (R-La.) and Sen. Conrad Burns (R-Mont.) may find it difficult to win support for bills each expects to introduce shortly.
McCain and Tauzin earlier this year introduced legislation to repeal the 100-year-old excise tax. The Burns-Tauzin initiative would appear to keep the excise tax alive in part, but possibly reduce wireless contributions to school and library Internet hook-ups overall.
“Financing the schools and libraries fund with money already being collected at the federal level is an innovative and affordable solution that will enable the program to do exactly what Congress intended-help America’s school children enjoy access to today’s advanced technologies,” said PCIA President Jay Kitchen.
In contrast, the Cellular Telecommunications Industry Association has refrained from taking a strong official stand on the Tauzin-Burns measure even though it shares many of the same concerns as PCIA.
“We’re looking to raise the issue of taxes and mandates with Congress,” said Tim Ayers, a CTIA spokesman. “The resolution may be different than we originally envisioned.”
Today, the federal government gets $2.5 billion from the 3-percent federal excise tax. The $1.25 billion that would go annually to schools, libraries and rural health-care centers would effectively cap the Internet program.
The wireless industry believes it is being forced to pay more than its fair share into the universal-service fund as currently structured.
Lawmakers became most vocal when telecom carriers recently announced they would pass Internet universal-service costs onto consumers.
FCC Chairman Bill Kennard, though, said he believes carriers have pocketed the benefits of deregulation and unfairly hit up consumers with new and unnecessary fees.
