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July 19, 2012

Capitol Hill

IPI expert referenced: Bartlett D. Cleland | In The News | Media Hit
  Communications Daily

Sens. Dick Durbin, D-Ill., and Mike Enzi, R-Wyo., are "pro-taxers" who are "trying to avoid a debate on the merits" of an e-commerce sales tax bill by adding it as an amendment to the Small Business Jobs and Tax Relief Act, the Institute for Policy Innovation said Wednesday.

The amendment amounts to proposing a "tax increase" in a bill "claiming to reduce taxes," the group said. The Marketplace Fairness Act, whose House version is to be taken up Tuesday by the House Judiciary Committee, inevitably "involves trampling on Supreme Court precedent" that prevents states from taxing an entity without a "presence" in the state, said IPI Policy Counsel Bartlett Cleland in an email blast (

States don't need to fix a presumed "loophole," which is actually "firm (and re-affirmed) constitutional law," because their tax receipts rose by an average 8.9 percent in the fiscal year ended June 2011, he said, citing April 2012 Census Bureau figures.

That the Telecom Act needs updating is shown because minorities and all other stakeholders to it are being hurt by the outdated legislation that's 16 years old, the top Washington executives of the two largest telcos said Wednesday. It's not just the 1996 law, but that large portions of it are based on language in the original 1934 Communications Act, said AT&T's Jim Cicconi.

Verizon's Tom Tauke said if lawmakers get the policy right, it will lead to the deployment of more infrastructure and services, and "therefore more economic opportunities made available for people who want to part of the industry infrastructure," as well as for "everybody who uses it."

They spoke at Wednesday's Minority Media and Telecommunications Council conference. Minorities are 34 percent of the population and 40 percent of the wireless market, said AT&T Senior Executive Vice President Jim Cicconi. Seven percent more minorities use wireless as a primary means of accessing the Internet as compared to white Americans, he said.

"It's one of the reasons the minority has a real stake" in the success of efforts to build out wireless networks, he said. "They are disproportionately helping the minority population."

The Telecom Act is generally irrelevant to the world we live in today, said Tauke. "The current law is just obsolete. There's no other way to characterize it: It's just obsolete," he said.

"It was written prior to applications, prior to 4G, prior to 3G, prior to 2G, prior to browsing. ... Everybody profits from having policies that actually are relevant to the world in which we live, and so if we can get a communications policy adopted by the Congress that is relevant to the industry and the world and the technology and the markets in which we are operating, that's going to, I think, improve things for everyone."

Young people apply for jobs using the Internet, and businesses that don't consider themselves part of the online world function by using the Web, Tauke said.

"If we get this right, the opportunities will explode all across society and will deliver things like education and healthcare and sustainability."

The problem is not so much that parts of the 1996 Act were written before the Internet, but that many parts were "adopted wholesale from the 1934 Act," Cicconi said. The FCC's core regulatory structure and tools "were written in 1934 for a monopoly, voice-only copper line phone system," he said.

The impediment is "not just the law itself, but the desire of the agency to try to apply 1934-type telephone regulations to what is essentially Internet, fiber-based IP infrastructure that it was never intended to cover," he said. Just like when you have a hammer everything looks like a nail, "their only tool is telephone regulation, and the temptation is to treat the Internet like it's one gigantic telephone," he said. -- MSS



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