Central Oregonian

What’s in store for Oregon’s digital future?

McLane, Whitsett both opposed to efforts to tax the Internet

Jason Chaney

November 05, 2012

During the past two years, the Crook County economy has benefited from the arrival of two major computer technology companies.

Facebook began building its data center in 2010 and Apple began work on theirs this past year. The need for both facilities, as well as other data centers statewide, has been driven by the continual growth of the Internet and the digital enterprises it has spawned.

However, efforts to regulate or tax the Internet have emerged, which could dampen its economic impact in Oregon. A proposal has emerged that gives the United Nations’ International Telecommunications Union more control over the Internet. Thus far, federal lawmakers have resisted such efforts. The U.S. Senate unanimously approved a resolution urging the Obama administration to fight efforts to give a United Nations agency more control, and the House passed its own version of the resolution in August.

Given the potential that digital technology offers for Oregon’s private sector, Crook County’s representatives in the Oregon Legislature believe the Internet needs to remain free and unrestricted by government.

“There are all sorts of regulations that people have proposed — everything from content regulation to taxation,” said Oregon Representative Mike McLane (R-Dist. 55). “What we have seen is historic growth and wealth produced by allowing the private sector to use the Internet without these types of government intervention that have produced lack of productivity in other industries.”

Oregon Senator Doug Whitsett (R-Dist. 28) considers taxing or regulating the Internet a huge mistake.

“We certainly don’t need to try to stifle the Internet by sucking money off of it,” he said.

At the same time, he does not necessarily feel that regulations or taxation will do enough harm to severely impact digital technology industries.

Last year, Whitsett attended the Wireless University, an event hosted in San Diego by several major wireless companies. He was then told that between 2009 and 2010, the Internet had more than doubled in capacity. By 2013, they estimated it would increase 35-fold, and by 2015 it would grow 50 times greater.

“Frankly, moderately taxing it would not have too much of a dampening effect,” Whitsett remarked.

He went on to note that some industries have actually suffered because of the continuing progress of the digital age. The U.S. Postal Service, for example, has seen its business dry up with the advent of e-mail and online billing.

Nevertheless, Whitsett does not believe the government should try to control the Internet with regulations or taxes.

“I do not believe we should aspire to stop change,” he said. “That’s inevitable. I think we should embrace it, but also understand what it is likely to do and perhaps let’s shape it some.”

For the most part, the federal government will determine how the Internet is regulated if it is at all. So far, they have resisted restrictions. At the state level, McLane feels the Legislature’s role is to make sure the taxing policies don’t stifle the Internet and the potential digital technology business it could create. Just last year, Oregon lawmakers fought to exempt data centers from being centrally assessed for taxation.

“I think the Legislature’s job is to make sure that Salem bureaucrats don’t do what they tried to do to data centers,” he said.