WASHINGTON-President Clinton last week vetoed appropriations legislation containing the 3-percent telephone tax repeal, ratcheting up a budget battle that will continue with a lame-duck Congress after Tuesday’s presidential and congressional elections.
The House retaliated against Clinton for vetoing the bill by refusing to consider a trade-related tax bill with major implications for trans-Atlantic commerce.
“It’s a shame to see the American consumer lose on this issue, especially since the bill was vetoed due to partisan wrangling, and not on its merits,” said Thomas Wheeler, president of the Cellular Telecommunications Industry Association.
While others put out similar statements of disappointment, most indications are that the treasury appropriations bill ultimately will be signed into law and the century-old telephone tax will be overturned.
With the budget cease fire in effect, parts of the federal government will operate on stop-gap funding for the next couple of weeks.
What makes the budget battle interesting for the telecom industry is that Clinton plans to veto a separate appropriations bill with funding for the Federal Communications Commission and digital wiretap implementation. The Commerce appropriations bill contains various telecom riders.
As long as that bill and others are alive, NextWave Telecom Inc. and other telecom firms have a chance of securing legislative relief before the 106th Congress adjourns.
Elsewhere, indications emerged last week that a tax credit for firms that offer high-speed broadband Internet service to underserved areas was dropped from the GOP’s tax package. The wireless industry said the provision was unfairly biased toward fiber-optic Internet carriers.
