In The News

Published February 1, 2007

Senators Draft Wireless Tax Moratorium Bill

Sens. John McCain (R-AZ) and Jim DeMint (R-SC) have introduced legislation that would impose a three-year moratorium on state and local governments adopting new taxes on wireless services. The wireless industry praised the bill and said the industry would work hard for passage this year.

The Cell Phone Tax Moratorium Act of 2007 is similar to an amendment McCain successfully added to Senate telecom legislation during a markup by the Senate Commerce, Science, and Transportation Committee last June. But the telecom package (HR 5252) failed to clear Congress last year.

The moratorium legislation, introduced in January on the first day of the 110th Congress, would forbid for three years states or other political subdivisions from imposing new “discriminatory” taxes on wireless services. Discriminatory is defined as taxes that aren’t generally imposed or are imposed at a higher rate than on other services. The wireless industry contends that, on average, more than 14 percent of wireless bills currently go to taxes and government-mandated fees, with some wireless subscribers paying nearly 25 percent.

ALEC Approves Model Legislation

The American Legislative Exchange Council’s (ALEC) Telecom and IT Task Force approved model legislation on information security management and electronic tax filing at its annual policy summit in Phoenix in December. The task force also approved a model bill on wireless tower siting. (See story, page 4.)

The Information Security Management Act is a model bill states could use to create a process to establish a department of information technology security and authorize policies, procedures, and enforcement mechanisms for the protection of data collected on citizens. Colorado and New York are the only states to have passed such legislation so far.

The language in the model OnLine Tax Preparation and Electronic Tax Filing resolution targets the growing commercialization of the IRS Web site in terms of providing electronic tax filing services for both federal and state returns. States say the IRS site has become a commercial portal for tax filing software and services and is damaging free state tax filing programs coordinated with authorized vendors.

In a separate meeting, the task force’s Health IT Working Group tabled discussion of model language for a health IT model bill. That proposal will be addressed in a series of conference calls in the coming months and at the ALEC spring meeting in Hilton Head, South Carolina.

Milwaukee Halts AT&T Upgrade

The city of Milwaukee has gone to court to stop AT&T from deploying its high-speed Internet Protocol (IP)-based video platform, claiming the company requires a cable franchise agreement to offer the service.

The action could lead to a court test on whether AT&T’s IPTV, dubbed U-Verse, is a cable TV service as defined by law. AT&T maintains the service, which delivers regularly scheduled and on-demand video programming from terrestrial-based servers to homes over phone lines, does not meet the regulatory definition of a satellite-based multichannel cable TV platform and, as such, does not require a separate franchise apart from its existing network and right-of-way agreements it already has with the city. To date, two states, Oklahoma and Connecticut, have agreed with AT&T’s interpretation.

Broadband Wireless Has Great Potential: Report

High-speed wireless broadband can be deployed economically and could penetrate up to 20 percent of households, offering Internet access comparable to DSL and cable modems today, according to a report from Technology Futures Inc.

As reported by the online publication Telecom Web, Lawrence K. Vanston, president of Technology Futures, said that over the next 10 years, residential broadband will migrate from speeds of 1 Mb/s to 24 Mb/s and above and will be able to handle bandwidth-rich traffic such as streaming video. Wireless technology and market evolution can be short-circuited by delays in government spectrum allocation, he warned.

The research was sponsored by the Telecommunications Technology Forecasting Group, a consortium of telephone companies comprised of AT&T, Bell Canada, BellSouth Telecommunications, Qwest, and Verizon.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.