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Regional ISPs fight back

Regional ISPs are banding together at the state and local levels to give themselves a greater voice in the legislative process and head off government efforts to tax ISPs and regulate information.

Internet service providers are banding together at the state and local levels to give themselves a greater voice in the legislative process and head off government efforts to tax ISPs and regulate information.

Today, a group of 25 ISPs and other Internet-related businesses announced the Florida Internet Service Providers Association, an organization that aims to fight, among other things, Florida's hotly contested efforts to tax ISPs. In October, the Association of Online Professionals, an international organization with more than 1,000 members, including Prodigy and Bell Atlantic Internet Services, plans to begin chartering state organizations so Net professionals can begin operating more effectively at the regional level.

While larger ISPs and online service providers have been active combating government action such as the Communications Decency Act, smaller mom-and-pop ISPs have been virtually excluded from the legislative process at a time when state and local government are launching efforts to tax them.

According to the AOP, the District of Columbia as well as Connecticut, Massachusetts, New York, Ohio, and Pennsylvania are now taxing ISPs. In addition, the ISPs are taxed by the city governments of Austin, Texas; Fort Lauderdale, Florida; Tacoma, Washington; and Fort Collins, Colorado.

AOP executive director David McClure believes that state and city governments have take a growing interest in taxing ISPs to replace revenue lost from levies on long-distance phone companies.

"The reason [for the ISP taxes] has very little to do with greed on the part of the states and municipalities. It really has to do with fact that long distance rates have been in free-fall for the past few years," he said. "States and municipalities rely heavily on long-distance taxes. They've got to replace that revenue."

The ISP taxes are unfair because they are effectively double taxes on access providers, which already pay telecommunications companies such as AT&T and MCI taxes for phone lines, McClure said.

Florida ISPs and other business organizations have taken center stage in the ISP taxation debate during recent months, staging protests in April to fight a government levy that would increase access charges for businesses by as much as 17.5 percent.

In May, the Florida legislature failed to pass a bill that would prohibit ISP and other technology-related taxes; Governor Lawton Chiles has asked a committee to review the ISP tax and make a decision on the matter next year. An estimated 800,000 to 900,000 users are connected to the Net through ISPs or online services in Florida.

Through FISPA, ISPs hope to participate more actively in Net legislation and activities, including the state tax committee, which individual local ISPs were not invited to join.

"The goal of FISPA is to provide a single voice in the capitol and put ISPs together so that they can discuss new products and technologies and provide a clearinghouse for information to consumers," said Jeffrey Rubenstein, president of FISPA and vice president for CyberGate Internet Technologies, one of Florida's larger ISPs.

Related stories:
Florida high-tech tax war heats up
Universal Net access policy proposed
Huge protest greets Florida Net tax