Sen. Conrad Burns Press Release on "Gore Tax".
Date: June 3, 1998.
Source:  Office of Sen. Conrad Burns.  This document was created by scanning a fax copy of the original, and converting it into an HTML document.  The letterhead graphics and pagination were lost in the conversion process.

        U. S. SENATOR               MONTANA
Conrad Burns

For immediate release:
Wednesday, June 3, 1998
Contact: Matt Raymond
(202) 224-8150
Ben O'Connell
(202) 224-6137

Burns Wants To Roll Back 'Gore Tax'
Proposes Way of Funding Internet Access Without Higher Phone Bills

WASHINGTON, D.C. - Montana Senator Conrad Bums, chairman of the Senate Commerce subcommittee on communications, is proposing legislation to roll back what some have dubbed the "Gore Tax," which funds school and library access to the Internet, without impacting educational access to the worldwide computer network.

Burns' proposal, which has not yet been introduced as legislation, would redirect a 3 percent excise tax on telephone service that has existed since 1914 toward advanced telecommunications services for schools and libraries. The tax was originally instituted at a time when telephone service was considered a luxury in order to help finance World War I and was later kept in place to service the budget deficit and general government. The tax resulted in receipts of $4.5 billion in 1997; the current cost of the schools and libraries program is $2.25 billion.

"Nothing in the Telecommunications Act suggested that the Universal Service Fund should become a cash cow for Internet access or a vehicle for political campaigns," Bums said. "The law explicitly states that this goal should only be accomplished in a way that is economically reasonable. I would argue that excessive line-item charges on consumers' phone bills which put the goals of universal service at risk fail this test miserably."

Bums noted that he has been a supporter of Internet access for educational purposes, but not at the expense of universal service. At the time of the passage of the 1996 Act, Burns stated: "I have no disagreement with my colleagues regarding the contribution which advanced telecommunications can make in society. Where I do part company, however, is the proposal to establish, in effect, an off-budget entitlement program - a system that buries much of the cost of providing telecommunications service to our health and educational systems in the telephone rates all Americans pay."

Burns on a 99-1 vote was the only senator to oppose the nomination of William Kennard as FCC chairman, citing the impact FCC proposals for universal service would have on rural [begin page 2] areas.

"Congress this year had the wisdom to dedicate the gasoline tax toward our transportation infrastructure. We must now acknowledge that the telephone excise tax should be dedicated to our telecommunications infrastructure," Bums said. "In the era of surpluses, we can avert the impact of the Gore Tax on telephone customers while still helping our kids have access to the tools that are crucial to their education and to the future of this nation.

"This proposal will preserve universal service, which is absolutely critical to rural states like Montana, while eliminating the need for new charges on phone bills. I am also asking the Commission to delay any action on these new charges until we have an opportunity to get this issue out in the open at the FCC reauthorization hearing on June 10. "

The FCC announced yesterday that it will vote June 9 on issues relating to universal service funding. Bums and Senate Commerce Committee Chairman John McCain have already announced a subcommittee hearing June 10 on FCC reauthorization, to be attended by al I five commissioners.