ITFA Limits FCC Control over Internet

(May 15, 1998)  The consensus version of the Internet Tax Freedom Act introduced Tuesday and passed by the House Commerce Committee overwhelmingly on Thursday morning not only protects the Internet from a myriad of potential taxes from thousands of state and local taxing authorities -- it restricts the Federal Communications Commission's ability to fix prices and assess regulatory fees in connection with the Internet.

Text: HTML Copy of Internet Tax Freedom Act, HR 3849.
Story: House Committee Approves ITFA, 5/15/98.

The Federal Communications Commission (FCC) does not have authority to tax or regulate the Internet or information services, but recently it has been acting as though it does.  This has concerned Internet proponents in the House, such as Rep. Chris Cox (R-CA) and Rep. Rick White (R-WA).

Rep. Cox has accused the FCC of becoming the "Federal Computer Commission."   Rep. White is the lead sponsor of the Internet Protection Act (HR 2372).

Section 2 of HR 3849 would insert a new Section 231 into the Telecommunications Act of 1996 which prevents the FCC, as well as the states, from regulating prices paid for Internet access or services.  Section 3 would amend Section 159 of the Telecommunications Act of 1996 to prevent the FCC from assessing regulatory fees on providers of Internet access or online services.

To monitor whether any direct or indirect regulatory fees are imposed on providers of Internet access or online services, the bill would require that a report be written, not by the FCC, but by the National Telecommunications and Information Administration.  The NTIA is a part of the Internet friendly Department of Commerce.

The bill would also require a report on foreign electronic commerce and telecommunications, also from the Department of Commerce.  Finally, the bill would create an Advisory Commission on Electronic Commerce to recommend further legislation: the 29 member panel would not include representation from the the FCC.


"(a) The Commission shall have no authority or jurisdiction under this title or section 4(i) of the Communications Act of 1934, as amended (47 U.S.C. 154(i)), nor shall any State commission have any authority or jurisdiction, to regulate the prices or charges paid by subscribers for Internet access or online services."
"(b) PRESERVATION OF AUTHORITY. Nothing in this subsection shall limit or otherwise affect (1) the Commission's or State Commission's implementation of the Telecommunications Act of 1996 (P.L. 104-104) or the amendments made by such Act; and (2) the Commission's or State Commission's authority to regulate common carriers that offer Internet access or online services in conjunction with the provision of any, telephone toll, telephone exchange, or exchange access services as such terms are defined in title I."



"INTERNET. The term 'Internet' means the combination of computer facilities and electromagnetic transmission media, and related equipment and software comprising the interconnected worldwide network of computer networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocol, to transmit information."
"INTERNET ACCESS. The term 'Internet access' means a service that enables users to access content, information, and other services offered over the Internet."
"ONLINE SERVICE. The term 'online service' means the offering or provision of content or information services to a user as part of a package of services that are combined with Internet access."