Internet related news from NECA

[Jeff Ogden]

The information below was selected from the July 29th issue of NECA's
Washington Watch. Too see the entire issue or past issues check the NECA
Web site:
     www.neca.org/wawatch/index.htm

  -Jeff Ogden
   Merit

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. . .

Following consideration of resolutions and update reports at the NARUC
Committee on Communications meeting, a panel convened on *Connecting All
America - The Rural Challenge.*  Panel participants included Chris McLean,
Deputy  Administrator, Rural Utilities Service; Marie Guillory, Vice
President, NTCA; the Honorable Tom Welch, Maine PUC; and Cheryl Parrino,
USAC CEO.

. . .

USAC CEO Cheryl Parrino gave an overview of the Universal Service
Administrative Company (USAC) and the recent Plan of Reorganization.
Parrino reviewed the relative size of the programs:  High-Cost - $1.7
billion; Low-Income - $500 million; Schools and Libraries - $ 1.3 billion;
and Rural Health Care - $100 million.

Parrino said that 1,444 eligible telecommunications carriers have qualified
for high-cost support and 5.1 million customers are benefitting from
low-income programs.  In addition, the Schools and Libraries Corporation
has processed approximately 32,000 applications and the Rural Health Care
Corporation has processed approximately 1,000 applications.

Parrino outlined the *new USAC* that would come about as a result of the
Plan of Reorganization filed with the Commission on July 1, 1998.  The
integrated corporation would be more streamlined, effective, and efficient,
Parrino said.  Further, the corporation would have a customer focus and
would serve as an administrator and not as a policy setter.

The Senate Finance Committee yesterday approved by a vote of 11 to 1 an
amended substitute version of the Internet Tax Freedom Act (S. 442).  The
main points of the approved bill are as follows:

(1)  imposes a two-year moratorium on Internet taxes, including Internet
access taxes, *bit* taxes, and multiple and discriminatory taxes on
electronic commerce;
(2)  calls for creation of a state-federal commission to study the issue of
appropriate taxation of Internet activity and to report its results within
18 months;
(3)  states explicitly that the Act would not adversely affect the schools
and libraries universal service program established in the
Telecommunications Act of 1996;
(4)  establishes U.S. negotiating objectives for future international trade
negotiations concerning regulation of electronic commerce; and
(5) places the tax moratorium into effect as of July 28, 1998, thus
allowing state Internet taxes in effect before that date to continue.

The legislation approved by the Finance Committee differs from the original
legislation, introduced by Senators Wyden and McCain, which proposed a
six-year moratorium on Internet taxes.  Senate Finance Committee Chairman
Roth submitted a substitute version proposing a three-year moratorium and
allowing 24 months for the study on Internet taxation.  Senators Chafee and
Kerrey proposed the amendment decreasing the time of the moratorium and
study, as well as language protecting the e-rate from falling under
jurisdiction of the Internet Tax Freedom Act.

The Senate Internet Tax Freedom Act as approved by the Finance Committee
differs in two main ways from the bill passed by the House of
Representatives (HR 4105):  the House bill requires a three-year moratorium
on Internet taxes and *grandfathers* already existing Internet access
taxes.

The National Telecommunications and Information Administration (NTIA)
yesterday released an update of its three-year-old white paper *Falling
Through the Net,* which reported that *information have-nots* are found
disproportionately in rural areas and *central cities.*  The updated study
found that 19.3% of black households and 19.4% of hispanic households own a
personal computer compared with 40.8% of white households.  Similarly, only
7.7% of black homes have Internet access compared with 8.7% of hispanics
and 21.2% of white homes.  The study concluded that *black and hispanics
now lag even further behind whites in their levels of PC ownership and
on-line access,* than was reported in the original 1994 study.

The new report Falling Through the Net II can be downloaded from NTIA¢s
website at www.ntia.gov.

PROVIDED COURTESY OF THE NATIONAL EXCHANGE CARRIER ASSOCIATION, INC.