Roaming With... NCSL President and Illinois State Senator Steven Rauschenberger
                                                            By State Senator Steven Rauschenberger

You may have recently seen or heard one of the commercials running on television and radio where someone receives some good news over the phone and the first question they are asked “Was it by cell phone or landline?” The receiver of the good news acts perplexed, like what difference does it make how the call came in?

Actually it does make a difference, because government can regulate and tax that call differently depending on the medium and technology used.

Innovation and convergence of existing technologies are radically expanding voice communications services, blurring distinction between telephone and Internet services; between landline, cable, wireless, and satellite; between long distance
and local service, and all other forms of communications.

Many of these new technologies are capable of delivering telecommunications services but do not fit within the definitions of the traditional regulatory framework for telecommunications. As a result, similar services can be delivered
via networks that are regulated and taxed differently, and for a growing number of technologies, these services are free of regulation and even taxation. This uneven governmental treatment, while not intentional, has led to competitive barriers, discouraged investment in infrastructure development, and delayed the roll out of advanced telecommunications services by existing regulated telecommunications providers.

State legislatures and state regulators were at the forefront of deregulation of the telecommunications industry, removing barriers to competition in local markets and advocating the infrastructure for the delivery of advanced telecommunications.
Many of my colleagues from across the country recognize that deregulation and competition are the primary means to reach the goals of advanced infrastructure development, universal service, expanded consumer choice, availability of services and cost effectiveness for our constituents.

In most states however, the deregulation of the industry was not accompanied by
corresponding elimination, simplification, or restructuring of monopoly-era taxes
that have historically been levied on telecommunications providers with  understanding that these taxes and fees can and will be passed onto the consumers. A recent study by the Council on State Taxation has shown that the average state and local effective transaction tax rate on telecommunications services is 14.17 percent, compared to 6.12 percent for general business nationwide.

"State and local governments are addicted to the discriminatory taxes on telecommunications. We need to break this cycle of addiction and stop punishing consumers for using technology."

State Senator Steven Rauschenberger

 


Pages:   1,   2