WASHINGTON-House lawmakers late last week failed to cast a floor vote on appropriations legislation that was to include a repeal of the telephone tax, putting that measure and other wireless-related legislation on hold until Congress returns from its August recess.
The House version of the telephone tax repeal calls for a phase-out of the 3-percent federal telecom levy. The Senate bill would eliminate the tax on wireless and wireline phone services in one fell swoop. The Clinton administration has raised concerns about the billions of dollars in lost revenue to the U.S. Treasury if the telephone tax is shelved.
Nevertheless, chances are good the GOP-led Congress-anxious to pass a series of tax cuts in advance of this fall’s election-will repeal the 3-percent telephone tax before adjourning.
If that occurs, the wireless industry will have succeeded in securing legislation on two key issues. On Friday, President Clinton signed the uniform-sourcing bill into law. The bill simplifies taxation of mobile-phone calls for carriers and cities and states.
Meanwhile, a number of other major bills of interest to the wireless industry hang in the balance.
When Congress returns after Labor Day, lawmakers will take up China trade and an appropriations bill that includes significant policy measures.
Wireless manufacturers are especially anxious to see the Senate vote on a bill to normalize trade relations with China on a permanent basis. Despite the controversy created by the bill, the Senate is expected to approve it. The House approved China trade legislation in May.
China has agreed to liberalize wireless equipment and service markets as a prerequisite to gaining U.S. support for membership in the World Trade Organization. With its 1.3 billion people and shabby telecom infrastructure, Communist China offers enormous export and investment opportunities for the U.S. wireless industry.
Lawmakers in September will take up a Senate appropriations bill that includes two highly controversial policy provisions. The bill, which funds the Federal Communications Commission, National Telecommunications and Information Administration and other agencies, would bar regulatory approval of purchases of U.S. telecom firms by overseas telecom carriers that are more than 25 percent owned by the government.
The provision, if not altered, would stop Deutsche Telekom AG dead in its tracks in its attempt to buy VoiceStream Wireless for $50 billion. Both firms are lobbying furiously to get the language-authored by Sen. Ernest Hollings (D-S.C.)-stripped from the spending measure.
“We haven’t taken a position for or against the provision,” said Steven Berry, senior vice president for congressional affairs for the Cellular Telecommunications Industry Association.
The same Commerce, State, Justice appropriations bill also includes a provision-championed by Sen. Judd Gregg (R-N.H.)-that would allow the FCC to reclaim licenses of bankrupt wireless firms, like NextWave Telecom Inc. NextWave is lobbying to have the provision removed, while the wireless industry pushes to keep it in the bill.
