Internet Tax Leadership Up for Grabs

With one of Congress’ most active and vocal Internet advocates scheduled to leave Capitol Hill in November, Republicans and Democrats are already scrambling for the powerful chairmanship of the House Commerce Committee.

Republican Tom Bliley has used his committee post as a pulpit for e-commerce, supporting his Internet-heavy home state of Virginia by seeking new ways for Congress to promote the expansion of e-trade while limiting direct government involvement.

Even if he were not retiring from Congress, Bliley would have to relinquish the Commerce Committee helm after this session. Republicans decided in the mid-1990s to impose their own 6-year term limit for committee heads. His imminent departure has many Internet observers wondering how the character of the committee might change when Bliley’s successor is named.

The Act to Follow

In the typically grand manner of Capitol Hill politicians, Bliley proclaimed recently that the Internet “will be a force for liberation, carrying the ideals of liberty and freedom behind the borders of the most repressive regimes on earth.”

On a more practical note, it has brought wealth to many companies in the United States, including such Internet cornerstones as America Online and domain name registrar Network Solutions Inc. (NSI), both of which are based in Virginia.

Bliley shepherded tax moratorium legislation through the House Commerce Committee last year and continues to team with Virginia Governor James Gilmore to raise vociferous arguments against any form of e-commerce tax.

Bliley has also been a harsh critic of the Internet Corporation for Assigned Names and Numbers (ICANN), a body commissioned in 1998 to privatize the domain name registration process. In the course of that transition, ICANN has repeatedly butted heads with the original domain name registrar, Network Solutions, over how much power it will retain when the doors to competition are opened.

Bliley’s Legislative Battles

Bliley’s most immediate fights are over Internet taxes and the electronic signatures bill he introduced last year, H.R. 1714. The taxation fight will come to a head soon, as the Congressionally appointed Advisory Commission on Electronic Commerce (ACEC) is due to release its report on how to address the controversial issue. Electronic signatures, while less inflammatory than taxation, could also have a significant impact on the growth of e-commerce, in Bliley’s view.

H.R. 1714 would allow consumers the choice of using electronic signatures in place of written contracts. Having passed the House, the bill faces reconciliation with similar Senate legislation also passed last year.

Though H.R. 1714 was referred to the Senate Commerce Committee in November, it has not yet been scheduled for a hearing or a markup. Bliley blames its slow progress on Senate Democrats “who insist on playing partisan politics with a good pro-technology bill.”

Possible Successors for Commerce Chair

If partisan politics succeed in stalling the electronic signature legislation through this year’s election-shortened session, the responsibility of pushing it through next year will fall to one of Bliley’s successors.

Lining up to replace him are three other long-time Commerce Committee members: Republicans Billy Tauzin of Louisiana and Mike Oxley of Ohio, and John Dingell of Michigan on the Democratic side.

If the House remains in Republican control after this Congressional session, party leaders will choose between Tauzin, who moved over from the Democratic side of the aisle a few years ago, and Oxley. Though Oxley is a longtime Republican, he wields less influence in Congress overall. If the Republicans should lose control of the House, Dingell will be a shoo-in for the Committee chairmanship.

Republican Front-Runner

Tauzin, chairman of the Commerce Telecommunications Subcommittee, is the senior Republican vying for Bliley’s seat. The boisterous Cajun, who is running uncontested for his twelfth term in the House, has long taken pride in his pro-technology stances — even during his days as a Democrat.

Tauzin joined seven other influential Republicans recently to discuss e-commerce, Internet trade, privacy, terrorism, the digital divide, e-signatures, trade tariffs, taxation, electronic-contracts and antitrust issues during a panel session at COMDEX, the annual computer industry mega-convention.

Tauzin has been extremely active in the world of cable and satellite TV, which is now overlapping frequently with the Internet realm as Internet service providers seek access to cable’s “wide pipe” to deliver more Internet content to consumers at a faster rate than typical telephone lines.

In a bipartisan effort to increase competition for ISP services, Tauzin and Dingell crafted H.R. 2420, the Internet Freedom and Broadband Deployment Act of 1999. The proposal would force cable companies to make their lines available to third-party ISPs at reasonable rates.

The legislation won support from both sides of the House and provided some of the impetus for America Online’s promise earlier this year to open Time Warner Cable’s wires to ISP competition if its purchase of the media giant goes through.

Where Tauzin would lean on the Internet taxation issue is less clear, since he is spending his energy on abolishing national income taxes and the Internal Revenue Service. Under a bill he introduced last year, Tauzin would replace income taxes with a 15 percent national sales tax across the board.

While the bill includes several exemptions, such as for educational supplies or for goods used to create other goods for sale at retail, the bill does not appear to have any exemption for Internet retail sales.

Republican Dark Horse

Oxley, representing a district in Ohio that is heavily populated by manufacturing firms, has also been taking pains to increase his visibility on high-tech issues. He has been an outspoken opponent of Internet sales taxes and was among the leaders of the House effort last fall to promote worldwide tax-free Internet commerce, a hot topic at last October’s World Trade Organization meeting in Seattle, Washington.

Oxley also considers himself “a leader in the policy debate over personal privacy,” according to his Web site, where he offers constituents guidance on child-friendly Internet surfing.

Now in his ninth term in the House, Oxley also stands an excellent chance of re-election, since in each of his past two campaigns he secured at least 64 percent of the vote, according to the Capitol Hill newspaper Roll Call.

Batting for the Democrats

Dingell is easily one of the oldest members of the Commerce Committee, having succeeded his father in 1955 as the representative of Michigan’s 16th district on the outskirts of Detroit.

He has been relatively quiet on Internet issues, though he did offer a substitute amendment to Bliley’s electronic signatures bill last November, which failed. The amendment would have slightly altered the language, but not the purpose of Bliley’s bill. Dingell has not authored or sponsored any other Internet-related legislation during the 106th Congress.

Having won re-election in 1998 with 67 percent of the vote, Dingell is considered a safe bet to remain in Washington. However, it is too soon to tell whether the Democrats will take control of the entire House, which would be necessary to vault him to the top spot in the Commerce Committee.