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10/30/2007
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Congress Approves Seven-Year Internet-Tax Ban

The measure now goes to President Bush, who is expected to sign it in time to meet Thursday's deadline.

It's not easy to get the partisan Congress to vote unanimously on anything these days, but apparently both parties can agree that Internet access should not be taxed.

With only two days to spare, the U.S. House of Representatives voted 402-0 on Tuesday morning to extend the moratorium on state and local Internet taxes. The move was applauded by Internet service providers, wireless carriers, and other Web companies that said that prices for Web access could shoot up as much as 17% without it.

Originally passed as the 1998 Internet Tax Freedom Act, the ban was extended to Nov. 1, 2007, as the Internet Tax Nondiscrimination Act of 2004. The new bill prohibits "bit taxes" and the like through 2014.

Republican lawmakers including Rep. John Sununu of New Hampshire, the author of today's bill, have called for a permanent ban on taxing Internet traffic, but Congress is apparently not quite ready for such a radical revenue refusal. The House had earlier approved a four-year version of the tax relief. The Senate passed a bill calling for a seven-year ban last week, so the measure now goes to President Bush, who is expected to sign it in time to meet Thursday's deadline.

Loath to miss a chance for a partisan dig, House Speaker Nancy Pelosi, a Democrat from California, released a statement that included the following: "Unlike the Republican-controlled Congress, which allowed the moratorium on taxes on Internet access to expire for more than a year, the Democratic Congress voted today to extend the moratorium on time, ahead of the expiration date of November 1."

Also applauding today's measure was Verizon. "Broadband access is now a crucial driver of America's economy, and this moratorium extension will ensure continued investment and growth in the broadband marketplace," said Peter Davidson, senior VP of federal government relations at Verizon, said in a statement.

The new legislation also broadens the tax ban to include forms of online communication beyond simple Web access. "These changes will protect instant messaging and e-mail, including voice and video messaging services as well as personal storage and other video services regardless of who provides them," said Sen. Ron Wyden, D-Ore., who helped push through the changes, in a statement.

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