Only days before it was to expire, the US Senate has approved legislation extending a moratorium on state internet access taxes for seven years. The decision was a compromise between lawmakers who proposed a shorter extension and those who insisted it should be made permanent.

The idea of keeping the internet tax-free and affordable is to encourage its use for distance learning, telemedicine, commerce and other important services. The vote comes two weeks after the House of Representatives approved a four-year extension of the Internet tax ban.

The two chambers must work out their differences on the bill before a final version can be approved and signed by President George W Bush. On Friday, Bush listed the Internet tax ban extension among a list of tasks that Congress had failed to accomplish.

The state tax ban has been in place since 1998. It was last renewed by Congress in 2004 for three years. It is scheduled to expire on 1 November. Internet service providers say the price of Internet access could rise by as much as 17 per cent if the moratorium on state taxes was allowed to expire.