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The House Ways and Means Committee's oversight subcommittee held a hearing August 4 to consider whether the fees on telephone bills to fund universal-service telecommunications discounts constitute an illegal tax.
"At first blush, I must admit that the charges that the FCC has imposed on telecommunications carriers appear to be taxes," said subcommittee Chair Rep. Nancy Johnson (R-Conn.), who observed that only Congress has the power to levy taxes.
Although Federal Communications Commission General Counsel Christopher Wright called the financing arrangement "fully consistent'' with the law that created the program, FCC Commissioner Harold Furchtgott-Roth said he feared the fee is indeed an illegal tax.
The Associated Press report on the hearing also noted that Reps. Billy Tauzin (R-La.) and Jerry Weller (R-Ill.) used the occasion to promote their alternative e-rate legislation, which would cut the 3% federal excise tax on telephone service to 1% and redirect the revenue to fund the program.
Posted August 10, 1998.
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