The U.S. Senate Examines Wireless Spectrum Policy

This week, the U.S. Senate Commerce, Science, and Transportation Committee held a hearing titled, “Wireless Broadband and the Future of Spectrum Policy.” The hearing examined current spectrum policy and what can be done to address consumers’ spiking demand for mobile broadband over time.

The hearing is timely. Just last week, CTIA – The Wireless Association® published a new report finding that it takes an average of 13 years for spectrum to be reallocated for licensed wireless use.  The infographics below really puts how long that process is into perspective:

CTIA_13YearsAndWhatDoYouGetCTIA_13YearsAgo

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition to the pop-culture references that show how much has happened since 2002, it is also important to point out how much wireless technology can change in that amount of time. For example, 13 years ago there were no smartphones, tablets or other smart devices. There were no apps, app stores or app economy. 4G technology and video streaming services such as Hulu, Netflix, HBO (Go and Now) and Showtime were far-out topics of a distant future. The same can be said for on-demand services such as Lyft and Uber, the booming mHealth industry and wearable technology. Fast forward to 2015 and half of today’s Internet traffic now comes from mobile, with apps, services and wireless technology playing increasingly essential roles in our everyday lives. And this trend will only continue through the coming years as more life-changing innovations comprising the Internet of Things come online, and 5G technology evolves from concept to reality – all requiring even more spectrum.

In short, in the time it takes to get spectrum deployed for use, the marketplace, services, and technologies can change dramatically, resulting in even greater demand for this finite resource. To this point, the FCC accurately projected a dramatic spike in mobile data usage over time in the National Broadband Plan and called for 300 MHz for mobile broadband by this year and 500 MHz for broadband by 2020. However, not even half of what was needed by 2015 has been made available. And the problem only gets worse with mobile data traffic expected to grow six times by the end of the decade.  The Brattle Group estimates that 350 MHz of licensed spectrum will be needed just to meet this anticipated demand.

Unfortunately, other than the upcoming broadcast incentive auction next year, there are currently no plans to make other spectrum available for licensed use. Considering the demand for mobile data, the current (and future) need for licensed spectrum and the time that it takes for spectrum to be ready for wireless networks, something must be done to develop an ongoing pipeline for licensed spectrum well into the next decade.

Congress, the FCC, NTIA and the wireless industry all have a vital role to play in making this much needed wireless spectrum pipeline a reality. We applaud Chairman John Thune and the members of the Senate Commerce Committee for holding this week’s hearing to explore how to do just that.

 


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House Judiciary Committee Moves on Digital Goods Tax Fairness

Earlier today, the House Judiciary Committee approved the ‘Digital Goods and Services Tax Fairness Act’ (H.R. 1643), paving the way for a House floor vote on the bill. We thank the Representatives Lamar Smith and Steve Cohen for sponsoring this legislation, and the House Judiciary Committee members for making this positive first step.

At the markup, House Judiciary Committee Chairman Bob Goodlatte said:

Unlike a physical purchase from a brick and mortar store, digital goods transactions can involve multiple jurisdictions simultaneously. Consider a Virginia resident downloading a movie from Washington-based Amazon while waiting at Chicago O’Hare Airport in Illinois.  Three states could potentially lay claim to that transaction, creating a real risk of multiple taxation for the consumer. The Digital Goods legislation provides a consistent, uniform sourcing framework to address this problem.

As Chairman Goodlatte pointed out, right now consumers could be taxed by several different jurisdictions for the same digital goods purchase. With state and local governments desperate for new revenue sources, that scenario is quite possible, and there’s currently no law in place to keep that from happening. That’s why it’s important to make sure wireless consumers are treated fairly and that we have a “national framework” or some “rules of the road” for how the digital marketplace is fairly taxed at the state and local levels.

There is still much work to be done to make digital goods tax fairness a reality. The House must now pass the ‘Digital Goods and Services Tax Fairness Act,’ and the Senate needs to act quickly on the companion bill (S. 851) with the same name.

Contact your Representative and Senators today and tell them to pass this much needed legislation!

Take action now!

 


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Florida Legislature Passes Wireless Tax Cuts in Special Session

We have some great news out of Florida! The House and Senate passed a tax cut package yesterday which includes a $100 million annual Communications Service Tax (CST) reduction on wireless services. The total tax savings in the package amounts to $430 million for Florida taxpayers. The bill was signed into law this morning and the wireless tax cuts will take effect on July 1st.

Originally, Governor Rick Scott’s proposal seeking to reduce the state’s CST by $470 million annually was considered by the Florida Legislature. The House passed a version of the plan, but the Senate was unable to vote on the companion bill before the legislative session abruptly ended. Lawmakers returned on June 1st for a 20-day special session to finalize a budget for the coming year and address the tax cuts proposal.

While the approved 1.73 percentage point CST cut doesn’t go as far as Governor Scott’s original call for a 3.6 percentage point reduction, it a great first step in the right direction that will save Floridians nearly $20 a year on every $100 spent on monthly service plans.

These wireless tax cuts are much-needed for Florida’s wireless consumers who currently pay over 22 percent in federal, state and local taxes on their monthly wireless bills. Florida has the 4th highest wireless tax rate in the country, a rate that is three times higher than the general sales tax of other goods and services in the state.

We applaud Governor Rick Scott, Representative Matt Gaetz and Senator Dorothy Hukill for their hard work and leadership on this effort to make wireless more affordable for wireless consumers. Thank you!

 


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House of Representatives passes Permanent Internet Tax Freedom Act

Good news from the U.S. House of Representatives!

The House voted to pass the Permanent Internet Tax Freedom Act (H.R. 235), which is strongly supported bipartisan legislation that permanently protects consumers from having to pay taxes on Internet access.

Now it’s time for the Senate to do the same. The Internet Tax Freedom Forever Act (S. 431), as it’s called in the Senate, is the companion to the bill passed by the House today.

The Internet Tax Freedom Act, as both bills are commonly known, was originally passed in 1998 to foster and encourage the continued expansion of Internet use in the U.S. As we all know, the Internet has revolutionized the way we are able to communicate, learn and do business. This legislation has been incrementally extended over the years, and is scheduled to expire October 1, 2015.

Please take a moment to write your Senators today and urge them to pass S. 431.

Let’s work together to make sure Internet access remains affordable and accessible to everyone, and tax-free forever!

Take action now!

 


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Digital Goods Fairness and Permanent Internet Access Tax Freedom

Earlier this week the U.S. House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing over several bills focused on the states’ authority to tax. One of the bills examined during the hearing was the “Digital Goods and Services Tax Fairness Act” (H.R. 1643), which was reintroduced in the House and Senate earlier this year. The clear sentiment of the Representatives and witnesses who participated in the hearing was that digital goods and services purchases should not be subject to multiple and discriminatory state and local taxes.

For some background on the issue, right now it’s possible to be taxed by several different jurisdictions for the same digital goods purchase. For example, let’s say you pay your wireless service bill in one area code, but you buy something with your device when you’re in another one, from a company in yet another part of the country. Under today’s tax regulations, you could potentially be taxed by all three jurisdictions!

As some of the witnesses highlighted during the hearing (and we’ve said before), State and local governments are desperate for new revenue sources so the scenario of digital goods purchases being taxed by multiple-jurisdiction is very real. That’s why it’s important to make sure that we have a reasonable tax structure which treats wireless consumers fairly. H.R. 1643 provides that structure, ensuring that consumers won’t get caught up in overly aggressive revenue schemes devised by State or local governments.

This legislation also paves the way for another important bill being considered by the House: “The Permanent Internet Tax Freedom Act” (PITFA – H.R. 235). As House Judiciary Committee Chairman Bob Goodlatte mentioned in his hearing statement:

Also before the Committee is the Digital Goods and Services Tax Fairness Act of 2015. It sets sourcing rules for the purchase of digital goods and services. These rules will help implement the Permanent Internet Tax Freedom Act’s ban on multiple taxes of Internet commerce. This ban expires October 1, 2015, and the Committee will soon move to renew it.

Like the digital goods legislation, PITFA seeks fair tax treatment of Internet commerce. Additionally, it permanently extends the moratorium on taxing Internet access, which is set to expire on October 1st. If the Internet access tax moratorium expires, the high state and local taxes that are already applied to wireless service could be expanded to include Internet-access, increasing the cost of service.

Luckily, PITFA has 179 bipartisan cosponsors in the House – an unmistakable sign of how important it is to keep this critical gateway for education, healthcare, jobs and entrepreneurial opportunities accessible and affordable for all Americans.

It is urgent that Congress pass both the ‘Digital Goods and Services Tax Fairness Act’ and ‘Permanent Internet Tax Freedom Act’ (known as the ‘Internet Tax Freedom Forever Act’ in the Senate) without delay to ensure that digital goods and services are taxed fairly and the Internet remains accessible for all and unhindered by discriminatory, duplicative taxes.

 


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