Hosting the nationwide, issues-oriented, live talk show Point of View, IPI’s Dr. Merrill Matthews discusses the latest on internet taxes and regulations with IPI president Tom Giovanetti. (Video begins at 43:11).
Their conversation first gives an overview of the so-called “net neutrality” argument and how Democrats and Republicans in the Senate recently voted to re-regulate internet service providers under 1930’s-era Title II telephone regulations.
“The re-regulation of the internet gives a free pass to companies like Facebook and Twitter,” said Giovanetti. “It would only regulate ISPs—cable companies and phone companies.”
“Regulations drive up costs,” he said. “The regulating of your internet company will not make your internet cheaper; it will likely make it more expensive.”
Giovanetti specifically warned of the impact of regulation on residents in rural, underserved broadband areas eager for the deployment of infrastructure.
“The likelihood of that happening declines,” said Giovanetti. “We know that in the year or so that those regulations were in place under the Obama administration, internet companies decreased their investment in infrastructure … because of the high costs.”
At 1:06:08, Matthews then steers the chat to discuss the recent Supreme Court case, South Dakota vs. Wayfair, Inc., which could allow states to collect sales tax revenue from online out-of-state purchases.
“This idea is related to federalism and to taxation without representation,” said Giovanetti. “States would love to be able to tax people who don’t get to vote in that state. States would love to have low taxes on their voters, but then charge high taxes on people from outside.”
Citing the Quill decision, Giovanetti said, “But states lost this fight when it came to mail-order catalog sales, and they’re trying to have exactly the same fight with relation to internet sales. And sometime in the next couple of weeks, we’ll hear what the Supreme Court’s answer is.”