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BILL WOULD USE TALKING TAX TO FUND INTERNET CONNECTIONS

WASHINGTON-The chairmen of the telecommunications oversight subcommittees in Congress late last week proposed legislation to eliminate two-thirds of the so-called “tax on talking” and place the remaining 1 percent in a fund to pay for Internet connections for schools, libraries and rural health-care centers.

The legislation, sponsored by Rep. Billy Tauzin (R-La.), chairman of the House telecom subcommittee, and Sen. Conrad Burns (R-Mont.), chairman of the Senate communications subcommittee, would end Federal Communications Commission control over the controversial schools and libraries program.

Burns, Tauzin and many other Republicans have been critical of the FCC’s management of the schools and library program. Their bill would shift that management to the National Telecommunications and Information Administration.

NTIA would receive an annual appropriation of no more than $1.7 billion per year for five years. This money would be raised by a 1-percent federal tax on all telephone calls. At the end of the five years, the tax would be eliminated. NTIA then would award grants to the states to be given to local schools, libraries and rural health-care centers. All bona fide requests for funding that met NTIA guidelines would be honored, Tauzin told reporters at a Thursday press conference.

Tauzin said the bill is “a major tax cut for all Americans that have telephones.” The cut comes as the federal excise tax, created in 1914 to pay for World War I, is reduced by 2 percent and the line items on long-distance bills that pay for the schools and libraries program are eliminated. These line items recently began appearing on long-distance bills after the FCC required long-distance companies to pay into a special fund to pay for the Internet connections.

The line items derisively have been called the “Gore tax” because Vice President Al Gore strongly supports connecting all schools and libraries to the Internet before 2000, when he is expected to run for the presidency.

Tauzin said there is “a growing consensus that something needs to be done” to save the schools and libraries program from the continuing assaults from both Capitol Hill and the courts. The U.S. Court of Appeals for the Fifth Circuit is reviewing arguments that claim the tax is unconstitutional.

This unconstitutional sentiment was echoed by Rep. Jerry Weller (R-Ill.), a co-sponsor of the measure and a member of the House Ways and Means Committee. The House Ways and Means Committee must sign off on the plan because it involves the federal excise tax. The federal excise tax raises $5 billion for the federal treasury, said Tauzin.

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