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FOR IMMEDIATE RELEASE
February 12, 2004
CONTACT: Kevin Schweers

HUTCHISON ANNOUNCES BILL TO HALT INTERNET ACCESS TAXES

WASHINGTON, DC -- U.S. Senator Kay Bailey Hutchison (R-TX) today introduced bipartisan legislation to impose a two-year moratorium on all Internet access taxes until Congress can determine a more permanent solution to allow e-commerce to blossom, while respecting the need of municipalities to charge fees for use of rights of way.

"The Internet revolution has created a new a world of educational, entertainment and business opportunities," Senator Hutchison said, "But it shouldn't open the floodgates to further taxing the American people. I support a permanent moratorium on Internet access tax because we should not place barriers on this important engine of commerce."

In 1998, at the height of the Internet bubble, Congress placed a moratorium on access taxes, which ultimately expired on November 1, 2003. While permanent legislative fixes have been offered, many were concerned with overly broad definitions that could be interpreted to ban franchise fees, which could cripple the ability of states and municipalities to collect fees for use of rights of way and infrastructure.

"This bill will give us time to develop a workable solution that will prohibit Internet access taxes while protecting the legitimate ability of our cities to raise revenues," Senator Hutchison said.

The bill offered by Senators Lamar Alexander (R-TN) and Thomas Carper (D-DE), and co-sponsored by Senator Hutchison, extends the moratorium for two years. This chart highlights revenue that could be in jeopardy if Congress were to enact the wrong permanent moratorium on Internet access taxes.


City
Telecom Franchise
Fee Collections
Percentage of
General Revenue
  Austin   $15,946,000  3.4%
  Dallas   $35,000,000   4.3%
  Denton   $1,085,676   3.0%
  Farmers Branch    $1,522,328   4.3%
  Fort Worth   $8,700,000   2.8%
  Garland   $2,856,456   3.3%
  Laredo   $2,127,987   3.1%
  Plano   $4,964,099   3.1%
  San Antonio   $14,912,000   3.1%
  Wichita Falls   $1,163,424   3.0%
Source:  Texas Municipal League

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