US Senators look to extend Internet tax ban
By Peter Kaplan
WASHINGTON, Sept 20 (Reuters) - Top Senate Democrats on Thursday were working on a compromise to extend a ban on state Internet access taxes before the moratorium expires on Nov. 1.
Senate Majority Leader Harry Reid and Commerce Committee Chairman Daniel Inouye said they hoped to clear the way for an extension of the ban with a compromise between supporters of a permanent ban and those who want the moratorium to remain temporary.
Inouye, of Hawaii, said he hoped that "reasonable legislation" could be endorsed by his committee next week.
The ban has been in place since 1998, and was last reinstated by Congress in 2004 for a period of three years.
Internet service providers say the price of Internet access could rise by as much as 17 percent if the moratorium on state taxes were allowed to expire.
A House measure to extend the Internet tax ban is still before the House Judiciary Committee.
Some Republicans in the Senate have complained that Democrats are dragging their heels on the issue.
"In a little over a month, Americans will be forced to pay more to access the Internet, receive e-mails on their BlackBerries and use the Internet on their cell phones if the Democratic leadership refuses to allow the Senate to debate and pass this legislation," said Arizona Republican Sen. John McCain, who is co-sponsoring a bill to make the Internet tax ban permanent.
Negotiations have centered on another bill sponsored by Sens. Tom Carper, a Democrat from Delaware, and Lamar Alexander, a Republican from Tennessee, that would extend the Internet tax moratorium for another four years.
That bill is backed by the National Governors Association. It includes a "grandfather" clause that would allow a handful of states to continue imposing Internet taxes -- those that already had a tax enacted in 1998.
Internet service providers, including telephone and cable companies, had favored the bill backed by McCain, which would make the ban permanent.
But sources on Capitol Hill said on Thursday there have recently been signs of compromise.
One industry source, speaking on condition of anonymity, said: "I think the priority for everyone is to make sure it gets extended."
