Government Regulation Widens Digital Divide

CSE has attended more than 150 presidential campaign events in Iowa, New Hampshire, Michigan and South Carolina. Our staff and activists have directly asked the candidates more than 200 questions. We know voters are passionate about technology issues and have appreciated willingness of candidates to answer specific questions.

Presidential candidates need to tell voters how they plan to break down obsolete government barriers and unleash the full potential of the high-tech economy for consumers.

Government taxation and regulation has exacerbated the “digital divide.” Some areas of America are receiving the benefits of high-speed Internet access, while others are denied. Outdated federal regulations- left over from the break-up of Ma Bell- limit the ability of some phone companies to provide highspeed Internet service to consumers. As a result, there are fewer companies that compete to provide consumers with service.

Consumers pay between 20 percent and 40 percent in taxes on communications services -rates similar to those imposed on alcohol and tobacco. Consumers pay nearly $6 billion every year for a phone tax originially enacted in 1898 to pay for the Spanish American War. The government imposes regressive rates of taxation on access to the technology that Americans want to rapidly expand to all regions and to all income levels.

We can give consumers the full benefits of high technology by removing high taxes and obsolete government barriers to competition and innovation. Before Saturday’s South Carolina Republican primary, candidates should answer the following questions:

“Senator McCain, you have signed CSE’s e-Freedom pledge, which calls for a permanent ban on Internet taxation and the elimination of the federal telephone excise tax. These are positive steps to encourage the development of the Internet and eliminate regressive taxation on communication. Shouldn’t we also repeal regulations that stop phone companies from providing Internet service, so we can expand access and reduce the government imposed digital divide?”

“Governor Bush, you have proposed an aggressive economic program that includes a large tax cut to keep the surplus out of Washington. Additionally, you have proposed a bold plan to end lawsuit abuse because trial lawyer greed is threatening the ability of our entrepreneurs to invest and innovate. And, your education plan recognizes the importance of competition and the need to educate individuals for our high-tech future. Will you show the same boldness and vision by repealing taxes and regulations that perpetuate the digital divide? For example, how long will you keep the Internet free from discriminatory taxation? Do you support eliminating the federal telephone excise tax and will you repeal regulations that prevent phone companies from completing to carry high speed Internet services for consumers?”