Senator Plans Internet Tax

Steve Javors
WASHINGTON — Oregon Republican Sen. George Smith plans to introduce a bill that will force more Americans to pay taxes subsidizing broadband technology in areas that are not currently wired for the high-speed service.

This week Smith plans to introduce a bill called “The Broadband for America Act of 2006.” The streamlined bill delineates only four key points, which will allow it to pass through the halls of Congress quickly.

“The bigger it is, the more comprehensive it is, the more likely it is to get bogged down,” Smith said at a conference of the National Telecommunications Cooperative Association.

Part one of Smith’s bill would require that all companies “capable of supporting two-way voice communications,” contribute into the Universal Service Fund, which subsidizes telecommunications penetration into rural and other areas.

The 2nd part of the bill would give the Federal Communications Commission 180 days to license the use of dormant channels on broadband airwaves in the broadcast TV band. They are called “white spaces.” The broadcasting lobby is opposed to such development, claiming it would affect the quality of its broadcasts.

Historically a cable company must negotiate an exclusive franchise agreement with a specific city or region to offer its services. Smith’s 3rd provision would eliminate this practice for new companies in the video sector.

The 4th provision piggybacks a bipartisan bill introduced last summer, which would prevent states from blocking public-sector companies from entering the broadband market.

Smith's bill also mentions apportioning more than $500 million per year to supply service in underdeveloped areas where mostly low-income housing is located. These households would be exempt from any broadband development fees.

Interestingly, the bill does not mention net neutrality, which would charge heavy bandwidth content producers extra fees to deliver its services faster.