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Coalition Opposes Attempts to Expand Universal Service Fund Tax

February 28, 2006

The Honorable Ted Stevens
Committee on Commerce, Science and Transportation
Washington, DC 20510

Dear Chairman Stevens:

As the Senate Committee on Commerce, Science and Transportation holds hearings on the Universal Service Fund (USF), we hope the Committee will reject any attempt to expand a Universal Service Fund tax -- or any tax -- to broadband.

Applying USF to broadband would be a dramatic departure from the "hands off the Internet" philosophy that has guided Internet development, plus it would represent a steadily increasing tax on the American people.

We believe that the best policy for the expansion of broadband is to allow the Internet to develop in the tax-free, regulation-free environment that has led to unprecedented technological innovation, access, and growth.

It's important to remember that broadband is a young, emerging industry that's investing billions of dollars in private risk capital in communities across America. All citizens -- including residents of rural communities -- stand to benefit greatly from new broadband technologies if they are allowed to develop without taxation or regulation. New broadband technologies including satellite, broadband-over-power lines, and WiMAX should be free to develop in a tax-free, regulation-free environment, as should existing providers of telephone, cable, fiber optic, and wi-fi. The expansion of these technologies represents the best way to provide all Americans with an increasing number of choices, in an increasingly competitive environment.

Taxation and regulation tend to freeze technology in place. Competition and innovation in an open marketplace lead to great technological advances and greater consumer access to those advances. We hope the Committee will oppose any tax on broadband, including any USF tax.


Grover Norquist
Americans for Tax Reform
Tom Readmond
Media Freedom Project
Daniel Clifton
American Shareholders Association
Kristina Rasmussen
National Taxpayers Union
George Landrith
Frontiers of Freedom
Karen Kerrigan
Small Business & Entrepreneurship Council
Jason Wright
Institute for Liberty