The U.S. House of Representatives is doing its part to help keep costs low for connecting to the Internet.

Driven in part by the efforts of Rep. Chris Cannon, R-Utah, the House passed legislation Wednesday designed to permanently prohibit any form of taxes on connecting to the Internet.

Previously, Congress had passed temporary laws designed to prevent similar connection taxation; however, certain states had begun circumventing these laws by taxing certain types of Internet connections, such as taxing those with DSL (Digital Subscriber Line) services.

As chairman of the congressional subcommittee with jurisdiction over this matter, Cannon hailed passage of HR 49 in a news release distributed by his office.

"(This) is the first time that we have had the chance in the House to extend this moratorium permanently," Cannon was quoted as saying from the House floor. "This bill would broaden access to the Internet, expand consumer choice, promote certainty and growth in the IT sector of our economy, and encourage the deployment of broadband services at lower prices. Today we establish a consistent national policy of not taxing Internet access through this bill."

The Internet Tax Nondiscrimination Act is designed to permanently ban the more than 10,000 local, state and federal organizations with taxing authority from establishing any form of taxation for those connecting to the Internet.

The ban on Internet connection taxation is also topology neutral, meaning it applies whether one connects through a land-based line or a wireless link.

As significant as passage of HR 49 may be, the companion bill in the Senate, SB 52, is still stuck in committee.

According to Cannon's press secretary, Meghan Riding, Cannon is hopeful SB 52 will make it out of committee and pass. But such an event is not a foregone conclusion.

So for now, we have a bit of "feel good" news out of Washington with greater hopes for permanent removal of taxation on Internet connections, all with a bit of help from a Utah congressman.


On a totally unrelated note, Provo-based Marketing Ally was acquired last week by Newark, N.J.-based IDT Corp. (NYSE: IDT).

Formed in 1992, Marketing Ally was, at its height, one of the leading inbound/outbound call centers in the United States with three locations in Utah and a fourth in Brazil, the former LDS mission field of the company's founder, Tim Stay.

During the DotCom boom, companies like Marketing Ally boomed right along with the Internet companies, providing them with inbound/outbound telemarketing services, as well as outsourced Web-based support functions.

The company was frequently recognized by industry trade publications as one of the leading companies in its field, and it also landed on the Utah100, the MountainWest Venture Group's annual ranking of the 100 fastest growing companies in Utah.

Stay eventually turned day-to-day management functions over to others so he could pursue additional interests, including the formation of a non-profit and creation of an investment incubator in Orem known as BizCradle.

Unfortunately, the longest economic recession in the past 40 years was on the horizon, something few people foresaw, including Stay.

"As the market downturn and the industry specific downturn continued, and competition from India grew, we had to consolidate and lower our overhead," Stay said.

Where Marketing Ally revenues at their peak had reached nearly $16 million, 2002 revenues were at $4.5 million.

"It became clear to me that Marketing Ally had to be part of a larger firm, and IDT has been really good to work with," Stay said.

Stay stepped back into Marketing Ally as its president in the beginning of 2003.

Just prior to last week's announcement, Marketing Ally was down to 350 employees centered in one location — the company headquarters at the former dance hall in Provo known in the late 1970s and early 1980s as the Star Palace.

Stay and his 350 co-workers are now employees of IDT, a $1.8 billion telecommunications and technology company, and more specifically, part of a newly formed call center business unit called IDT Contact Services.

Although terms of the transaction were not disclosed by either party, Stay can apparently receive an earn-out over a three-year period based upon the success of the new IDT Marketing Ally business unit.


David Politis leads Politis Communications, a public relations, investor relations and marketing communications agency serving the high-tech and biotech markets.

E-mail: dpolitis@politis.com.