The Hundred Years' War

After 108 years, the U.S. Treasury has repealed a 3% tax on long-distance calls, which was originally imposed to help fund the Spanish-American War of 1898. This is a grave mistake, one that plays right into the Spaniards' hands. Biding their time while we drained our resources, the Spanish are now waiting only for the repeal of the local version of the tax before they pounce, with a new armada and an army outfitted in cool conquistador helmets. Next year, nobody will expect the Spanish Inquisition.

Telecom carriers are widely said to have been long opposed to the tax, but if that were true, why did they refer to it as a “federal excise tax” on bills rather than a “Spanish-American War tax,” which would have roused pressure to abolish it?

The story of the long-lived tax (which started out in support of the Spanish-American War but later shifted to World War I and eventually became permanent) is a resonant parable warning against the dangers of government intervention in technology sectors such as telecom. And unlike the tax, the parable only became more relevant over time: Even last year, a congressional committee suggested that the tax could be applied to “all data communications services to end users” before opposition rained down on that proposal from the likes of Intel, Microsoft and Skype.

The tax's repeal (and the new publicity it brings to the parable) comes at an opportune time for those who are now trying to dissuade federal lawmakers from getting involved in the Net neutrality debate. The question can be asked: If Congress acts now, will its decisions linger, vestigially, for a century? To be fair, the duration of individual acts of government telecom intervention is getting shorter. AT&T reunited only 22 years after the government broke it up. And the fruit of the celebrated Telecom Act of 1996 withered long before its 10th anniversary.

Will the next Telecom Act survive even five years? Who knows. Then again, by the time the first Internet neutrality law is repealed, we may all be speaking Spanish.