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Congressional Subcomittee Debates Domain Fees

Members of the House Subcommittee on Basic Research this week met to debate a bill that would return a portion of the domain fees collected by Network Solutions and set aside for the Internet Intellectual Infrastructure Fund.

Rep. Lee Terry, a Nebraska Republican and member of the subcommittee, in February introduced the "Home Page Tax Repeal Act" which would give money collected for the fund back to domain registrants.

In April 1998, a federal judge ruled NSI lacked the authority to impose the $15 a year fee and Network Solutions stopped collecting it. Since the decision, NSI has not been allowed to spend any of the estimated $50 million that has been collected. Of that total, $23 million was to go to the Next Generation Internet, or Internet II, project currently underway.

"This unconstitutional tax money should be refunded to Internet users. We in Congress should ensure this new technology remains tax free and protect citizens against taxes not debated by their elected body of representatives," Terry said in a statement released late Wednesday following the hearing.

Other committee members who favor returning the money include Senate Majority Leader Trent Lott, Senate Appropriate Committee Chairman Ted Stevens and committee members Ernest Hollings and Daniel Inouye as well as Bill Archer, chairman of the House Ways and Means Committee.

Terry said he also has the support of House Majority Leader Richard Armey.

In 1992, the National Science Foundation granted NSI an exclusive five-year contract to register second-level domain names. In 1994, the NSF granted NSI the right to charge a fee for the service. Beginning in 1995, NSI started collecting $100 for registrations which would last for two years -- 30 percent of which was deposited in the special fund.



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