MAJOR PAPERS:

• In a potential breakthrough for Google (NASDAQ: GOOG) , Verizon Communications (NYSE: VZ) and Vodaphone Group's (NYSE: VOD) Verizon Wireless, and Sprint Nextel Corporation (NYSE: S) are both in talks about Google's new mobile phone operating system, reported the Wall Street Journal (subscription required).
• Congress approved a seven year extension of ban on Internet tax, voting 402-0, and President Bush is expected to sign the bill, according to the Wall Street Journal.
• Stan O'Neal may be gone, but the SEC's enforcement staff is now looking at how Merrill Lynch (NYSE: MER) informed investors about its $8.4B write-down that forced O'Neal out, reported the Wall Street Journal.
• CLP Holdings (OTC: CLPHY), Hong Kong's largest power company, is planning to bid for electricity assets in Australia, India, Singapore and other countries in Southeast Asia, reported the Financial Times (subscription required).

OTHER PAPERS:

• The Star reported that life insurance company Manulife Financial Corporation (NYSE: MFC) is open to making acquisitions in Malaysia if suitable opportunities in the country arise, according to Manulife's senior executive vice-president and general manager for Asia, Robert A. Cook.
• The U.K. Times reported that British Airways' (OTC: BAIRY) plans to create a new airline offering flights between Europe and New York have been thrown into disarray after the Federal Aviation Administration threatened to block any increase of air traffic into New York's chronically congested JFK Airport.

The internet started as Woodstock; relatively anonymous participants free to carry on without fear of apprehension, taxation or repercussion, trusting that others shared their values of respect, reason and cooperation.

As business began to stick its toes into the virtual world, the internet became Bonnaroo; vastly increased content for a bargain price, if you pay the entrance fee, wear your wristband, and don't mind congestion and occasional chaos.

Now, though, the internet has becomes a crucial part of business survival and a tool for predators of all persuasions. So the internet is evolving again, into an olympiad. Everything costs, sponsorships and advertising drive the show, everyone carries verifiable I.D., and every access is carefully monitored.

The U.S. Congress is looking at this issue closely. Their ban on taxing internet access ends in November, an opportunity that temptingly coincides with state revenue shortfalls. The Congress is also once again considering a mandatory nationwide requirement that internet vendors collect sales tax from out of state customers. One senator, according to C/Netnews.com, is even predicting we could see more debate about a tax on e-mail.

I think the internet tax and sales tax measures stand a chance of passing, despite massive consumer protest, because states believe internet shopping robs them of tax revenue and damages their local merchants. Such a measure could have an immediate impact on Amazon.com (NASDAQ:AMZN) and eBay (NASDAQ:EBAY), among others.

The e-mail tax is less likely. In defense of such a tax, however, legislators could refer to a proposal by, among others, Bill Gates, to impose a charge on e-mail as a way of fighting spam. One way or another, the spam issue is coming to a head as it continues to gobble up bandwidth.