Clock Ticking on Spam, 'Net Access Bills

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WASHINGTON — With House and Senate leaders hoping to close this year’s
congressional session on Friday (Wednesday at the latest), debates over
other issues may not allow time to pass legislation on spam, or the Internet
access tax moratorium, which expired Nov. 1.

Negotiators have unsuccessfully met for weeks to resolve differences on
the Internet access tax ban and to craft an anti-spam bill. With two of the
president’s pet policies, health care reform and a sweeping new energy bill,
and unresolved budget bills consuming congressional debates this week, time
may be running out for this year’s two major technology initiatives.

The House passed a bill
calling for a permanent ban on Internet connection taxes, but similar
legislation hit a roadblock in the Senate over interpretation of the
language, and whether a ban should be permanent. The Senate approved an
anti-spam bill, but the House is mired in a committee dispute over penalties
and the definition of spam
.

“It all depends on the adjournment date,” a key House staffer told
internetnews.com on Monday. “If it turns out to be Friday, it’s going
to be tough to get the bills through by the end of the year. If we meet into
next week, the chances improve, but not by much.”

If neither bill passes before adjournment, legislation will he held
until January when the second session of the 108th Congress resumes.

Of the two pending issues, House and Senate committee staffers and
attorneys surveyed by internetnews.com predict the Internet access
tax ban has the best chance for passage this year.

The Senate legislation, sponsored by Ron Wyden (D.-OR) and George Allen
(R.-VA), is similar to the House bill. It not only makes taxes on Internet
access permanent, but also phases out a grandfather clause that preserves
state and local taxes on Internet access imposed and actually enforced prior
to Oct. 1, 1998.

The bill expands the definition of Internet access to prevent states
from taxing telecommunications services used to provide Internet access,
particularly DSL, which some states interpret as a telecommunications
service open to taxation. Cable modem access is not taxed by states.

“I think everyone agrees the moratorium works and there are only a few
aggressive senators blocking it,” a Republican legislative director
said. “If we can get it on the floor for a vote, I think it’ll fly through.”

Opponents to the access tax ban claim the new definitions of access are
too broad and could cost states as much as $9 billion in taxes annually.
A number of states contend the new definitions would exempt not only certain
telecommunications services used for Internet access, but also expand
the pre-emption to include bundled telecom services offering high-speed
connections, and local and long distance telephone service in one package.

Allen hopes to introduce an amendment this week to clarify the
definitions in hope of demonstrating legislative intent is to exempt taxes
only on dial-up and high-speed access connections. His amendment would make
the ban permanent.

A Senate Democratic legislative manager predicts a permanent ban
with tweaked access definitions would pass the Senate, if it can reach the
floor for a vote.

“If they (senators opposing the bill) had the votes to stop it, they
would have called for a straight up-and-down vote,” he said. “They don’t,
and
that’s why they’re playing all these games by putting a hold on the bill
and threatening a type of filibuster.”

A press spokesperson for Sen. Lamar Alexander (R.-TN), one of the
lawmakers opposing the tax ban, said the Senator removed his hold on the
bill, adding, “It could come up this week, but the negotiations are so fluid
right now, it’s hard to say.”

Anti-spam legislation is more problematic, according to sources.

Last month, the Senate approved legislation known
as the Can Spam Act, sponsored by Wyden and Conrad Burns (R.-MT). Last
week, the bill was endorsed by the
American Association of Advertising Agencies (AAAA), the Association of
National
Advertisers (ANA) and the Direct Marketing Association (DMA).

Marketing groups support federal legislation as a better
alternative than attempting to comply with a proliferating number of state
anti-spam laws. The groups especially fear the recently passed
California spam law, effective Jan. 1, that effectively bans ad-supported
e-mail newsletters, among other tight restrictions.

The ‘Can Spam Act’ requires bulk commercial e-mailers to include opt-out
provisions and valid header and subject lines in solicitations. It provides
civil and criminal penalties for violations of the law. The bill defines
spam as an “unsolicited commercial electronic message” that’s not a
“transactional or relationship” message which is sent to a recipient without
prior affirmative or implied consent.

While providing for no private right of action by spam recipients, the
bill
allows Internet service providers (ISPs) adversely affected by violations to
bring civil action. It sets a maximum $1.5 million civil penalty for knowing
and willful violations. The bill triples monetary damages for spammers who
engage in e-mail address harvesting and dictionary attacks.

The bill includes an amendment championed by Sen. Charles Schumer
(D.-NY) directing the Federal Trade Commission (FTC) to come up with a plan
for a federal do-not-spam database, similar to the agency’s popular
do-not-call
registry. The legislation gives the FTC, which opposes the amendment, six
months to report to Congress regarding potential drawbacks to such a
registry.

Disputes about civil action, damage caps and definitions of what constitutes
spam continue to divide House Energy and Commerce committee members. Its
chairman, Billy Tauzin
(R.-LA), predicted the House would pass an anti-spam bill this year.

“There are no hearings or mark-ups scheduled so far this week on the
anti-spam bills,” a House Energy and Commerce staffer said. “We could
take the Can Spam Act to the floor for a straight up-and-down vote or let
members amend it. There’s a chance we might get something out of committee.
What direction do we take? I honestly don’t know right know.”

He optimistically added, “We still hope to have a spam bill on the
president’s desk this year.”

Prabhat Hajela, a science and technology fellow in Burns’ office, said last
week at Bigfoot Interactive’s “Spam Summit” in New York that he hoped the
Senate would adjourn this week, but held out hope the House would pass Can
Spam. Hajela says the bill is
written so certain amendments can be changed or removed without nullifying
the whole.