[Congressional Record (Bound Edition), Volume 150 (2004), Part 19]
[Senate]
[Pages 25202-25203]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        INTERNET TAX MORATORIUM

  Mr. VOINOVICH. Mr. President, on Wednesday of this week, by unanimous 
consent, the Senate adopted S. Con. Res. 146, which made slight 
modifications to S. 150, the Internet Tax Non-Discrimination Act.
  I am pleased that the House passed S. 150 with the Senate changes, 
thereby clearing the legislation for President Bush's signature. It is 
long overdue.
  This action ensures that Internet access will remain free from 
taxation, a policy that has existed since 1998, when, as Governor of 
Ohio and president of the National Governors Association, I helped 
negotiate the first moratorium.
  I rise to commend my colleagues in the House and the Senate for 
resolving this issue in a bipartisan manner. Just over a year ago, the 
Senate became engaged in a spirited debate over the future of the 
Internet tax moratorium.
  The sponsors of S. 150 argued that an expanded and permanent Internet 
tax moratorium was necessary to facilitate the growth of broadband 
Internet technologies.
  On the surface, this sounded like a very reasonable position. In 
fact, after studying this issue, I realized that not all Internet 
technologies were being treated equally. For instance, some States 
treated digital subscriber line, DSL, service, which uses phone lines 
to provide high-speed Internet access, as a ``telecommunications 
service'' and therefore taxed it. Other States treated DSL Internet 
access as an ``information service'' exempt from taxation. The 
inconsistent treatment of DSL service created a competitive 
disadvantage for some Internet service providers, and I was willing to 
help level the playing field. However, several of my colleagues and I, 
including Senators Alexander, Carper, Feinstein, and Bob Graham of 
Florida, had more serious concerns with S. 150.
  Specifically, the CBO stated that the new and expanded definition of 
``Internet access'' in S. 150 was an unfunded mandate. Therefore, it 
was believed that S. 150 would cause significant revenue losses for our 
State and local governments at a time when they were facing their worst 
economic crisis in a generation.
  In fact, the State of Ohio projected revenue losses of up to $350 
million per year if the Commerce Committee's version of S. 150 passed 
the Senate. As a former mayor and Governor, I knew my State could not 
afford to lose $350 million per year.
  Fortunately, the debate on S. 150 was taken off the floor, where 
Members and staff could try to close the chasm that separated the two 
sides. From November 2003 to April 2004, Members and

[[Page 25203]]

staff worked feverishly to find common ground. Both sides listened and 
worked in good faith. Although it took a few months, I was pleased with 
the end result.
  The final bill, which passed the Senate on April 29, 2004, by a vote 
of 93 to 3, created a level playing field for Internet service 
providers sought by the bill's sponsors, while at the same time 
protected State and local governments from any immediate financial 
harm.
  I was pleased that the original grandfather clause was extended for 
the length of the moratorium because it provided protections to States, 
including Ohio, from losing further revenue.
  Finally, the negotiated 4-year term of this legislation provides 
Congress with the necessary time to examine and understand how the new 
and expanded definition of ``Internet access'' affects both the growth 
of broadband Internet service and the revenue base of State and local 
governments. There has to be some balance.
  Senator Stevens assures me that the Commerce Committee will closely 
reexamine these issues next Congress. In fact, we just talked about it 
10 minutes ago, about the fact he wants to move forward very 
expeditiously to tackle this very complicated subject.
  I commend the Presiding Officer, Senator Allen, and Senator Wyden for 
their leadership and commitment to this issue. Certainly, no two 
Members of the Senate have spent more time on it. I also thank Senator 
McCain for his patience and perseverance and willingness to offer a 
reasonable compromise upon which both sides could agree.
  Additionally, I offer my thanks to Senators Alexander and Carper. 
Their vision and steadfast determination to protect State and local 
governments is commendable, and I was proud to work so closely with my 
colleagues and former Governors on this issue.
  Finally, I would be remiss if I did not thank the staff of the 
Presiding Officer and the staff of other Senators for their hard work 
and dedication. They really rolled up their sleeves and went to work. 
They spent hours, countless hours, negotiating subtle yet important 
nuances in the legislative language in order to reach a compromise. 
Some of those nuances I had a very difficult time understanding, but 
they understood them, thank God. The debate and end result of the 
Internet tax moratorium proves we can work through difficult and highly 
technical issues in a bipartisan manner.
  As the 108th Congress comes to a close, it is my sincere hope that 
the same type of bipartisan spirit can be extended into the 109th 
Congress. It is vital that Members of this body work together to find 
common ground on issues that are important to our citizens, our States, 
our country, and, in some instances, the world.
  I, for one, am looking forward to the challenges we face and am 
confident we can solve the difficult issues for our day and leave a 
lasting legacy for our children, grandchildren, and future generations.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will please call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COLEMAN. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________