Wireless Providers to Pay Universal Service Fees?

andyo writes "Mailing lists are abuzz with the news that wireless Internet providers may have to pay fees to support plain old telephone service. My own perspective is at the O'Reilly Network." The Universal Service Fees are taxes set up long ago to assure that telephone service was provided to everyone, even people who it would normally be uneconomical to serve. The theory is a good one, the execution maybe not. (Maybe if the fees went towards Universal Broadband?)

Comments

Fees, taxes, fees, taxes

[freeio]

The local phone service I get (through my cable provider) comes with a bill broken out according to every mandatory fee and tax, and the mandatory fees and taxes are larger then the phone service cost itself.

Whatever they may be for, the combination of added fees and taxes on phone service is exhorbitant already. Adding them to other net services is just another revenue stream for someone else.

Phbbbbbt!

just a bit more proof

[medcalf]

that taxation with representation isn't so hot, either.

Actually, it's worse than that. This is another form of taxing the unrepresented, since WISPs are unlikely to get the ear of Congress for a redress of grievances, when compared to the telcos who can spit out large amounts of bribes...er, subsidies...er, direct democracy to the Reps and Senators.

Federal Government

[faldore]

If you read the constitution, there is nothing in there about the federal government having the right to govern communication in any way (the entire point of the FCC). However, there *is* a statement that any function not delineated as an area of federal authority will be the in the jurisdiction of the states. It is unconstitutional for the federal government to mandate such charges.

When Taxes are too high

[Britano]

When my taxes rise above 50%, I quit and I will live off the Government. simple math, I'm not getting as much as I put in, so I decide to still make a profit.

Or they could just keep cutting income taxes, and then let the ball start rolling and start cutting other taxes.

BTW, don't taxes require an act of Congress to be inacted *cough CONSTITUTION cough*

Re:When Taxes are too high

[rapid prototype]

When my taxes rise above 50%, I quit and I will live off the Government. simple math, I'm not getting as much as I put in, so I decide to still make a profit.

now i am not in favor of high taxes by any means... but you seem to be missing the fact that 50% of $1M is still $500K. you can't pay MORE money than you bring in unless taxes are above 100%. so this "making a profit" nonsense is just that: nonsense.

when it gets to the point where someone making $20K is being taxed 50%, and "living off the Government" provides more than $10K, THEN start talking.

-rp

Re:When Taxes are too high

[Rupert]

If you only put the barest minimum into your job you won't be staying in the top tax bracket for any great length of time.

More value

[FurryFeet]

If the fee was applied to provide interner service to people who can't afford it, it would make sense. Also, it would (slightly) be an investment.
How? Well, there's an old story about how a long time ago, in a small town, there were only two phones: 001 was the Mayor's house, and 002 was the fire department. After a couple of months, the Mayor cancelled his line, since it was idiotic to pay $20 a month to be able to call just the fire department, wheter there was a fire or not.
The point being: If you have a phone, the value to you is increased as more people have one, since you have that many more potential people to contact. The same principle would apply to internet.
Sorry for the long rant. I'll shut up now.

Re:Wi-Fi

[wiredog]

Admittedly, there is no "right" to affordable food. Making sure that farmers can communicate and travel at low cost does provide the societal benefit of low food costs.

Re:NO NO NO

[Ubergrendle]

Uh oh, not another IAMAEBSOOTV ("i am not an economist but saw one on tv"). Adam Smith had revolutionary ideas..for a couple of hundred years ago. If Smith nailed everything down so perfectly the first time, why bother having a field of economics now? I mean, everything can be simplified to pure laissez faire market capitalism, right??? Wrong. Unfrotunately there are lots of trends in open markets that defy explanation, or that require much more complex models to explain; things like anti-trust law exist for a good reason, as do keynsian economics, game theory, etc etc. For example, game theory indicates that competition is good, but a clear cut winner is not good.

Perspective

[MountainLogic]

Whan this tax on phone service was created it was to help farmers and others get phone service. This was needed because no company would touch these areas, including Bell. This was to every one's benefit. City folk could now call their county cousins and country folk could call the fire department when their barn caught fire. Non-monopoly ag has alwaus been a very low profit proposition and it was clear that rural user could not afford the high cost of teleco infrastructure. This was also done for rural electrafication along time ago (by general fund taxes I think). If you don't think you benefit from community civil works than I suggest you move to Chad and see what it's like to live without a real government.

YES YES YES

[jdcook]

"There is a market for DSL, wireless, and Cable. The government does not need to stick their foot into this market to make it work. As Adam Smith said, the 'invisible hand' will give these people their last mile connectivity."

I grant I haven't read all of Adam Smith, but I don't recall anything about "last mile connectivity." That was a joke.

"It IS NOT, repeat IS NOT governments job to force the economy into any position what so ever. If a company can figure out how to make these connections profitable they will, thanks to the 'invisible hand', and the company wins, the consumer wins, the economy wins, and it was all done without a negative effect. So how simple that works.

The government cannot help but "force the economy." It is, after all, a huge consumer. This demand helps shape the market. Now there is of course a difference between consuming pencils and gasoline and nuclear triggers on the one hand and planning an economy on the other. But the government has a role there too. The government's job should be to serve its citizenry. If that means that markets do not operate with maximal efficiency, who cares? "The market" is just an abstract concept, a tool that helps us understand how parts of the economy function. It is not something to be a slave to.

I do not understand this obsession of deeply ideological Libertarians with the capital-M Market. It seems as though it is their deity and that cost efficiency is the only axis on which they measure morality. The logical conclusion of such single mindedness is that if one cent more wealth, in aggregate, will be created by my gutting you like a fish, I am morally obligated to do it. Obviously (I trust and hope) this isn't what Libertarians really want but the most ideological ones don't seem to have any appreciation of nuance.

If no one can figure out a way to make last mile connections profitably, no one will build them. And no amount of "leave it to the market" mantra will change that. But if people want the connection, why shouldn't the government change the regulatory environment to make it profitable for companies to do so? This is just changing the ground rules for the market. Market forces themselves still exist. Is it possible that the government will do something so stupid that they will make things much worse? Of course. But they might also be able to make the change so that the effects aren't so bad. Does that mean that some person or company will incur costs that they wouldn't have otherwise? Yes it does. But again, so what? Money is not the only value. It is merely the easiest to calculate.

Re:YES YES YES

[Rick the Red]

But if people want the connection, why shouldn't the government change the regulatory environment to make it profitable for companies to do so?

I'm sorry, but you lost me there. I live in a rural area. AT&T Broadband found a profitable way to bring me a high-speed internect connection. Qwest has not found a profitable way to do this, and thus ATTBI is my only option; Qwest has told me flat-out that we will "never" (direct quote) get DSL -- or even POTS faster than 26k -- due to our distance from the switch. And the low rural population density makes it prohibitive for them to build a closer switch.

Now, why on Earth should the government tax ATTBI enough to make DSL profitable for Qwest? Why should the government tax someone's success to subsidize someone else's failure? With your logic, the government should tax Borders and Barnes&Nobel to subsidize Amazon.com! The government should not be in the business of choosing winners and losers in the marketplace.

Re:YES YES YES

[maxpublic]

I do not understand this obsession of deeply ideological Libertarians with the capital-M Market.

The odd thing here is that most so-called Libertarians on Slashdot spout their own ideology incorrectly, generally embracing an extremist viewpoint which has more to do with college-kid pseudo-anarchy than actual libertarian ideals. Some don't even realize that the U.S. isn't a free market system, nor even close to one.

I've noticed that this is true of many 'libertarians' and their opponents (who're equally unequal to the task of researching what a real libertarian is). A battle of wits where both sides are suffering a critical shortage.

You'll also find this phenomenon amongst Ayn Rand supporters and Ayn Rand opponents. It appears the vast majority have never actual read anything that Ayn Rand has published. Ask them what objectivism is and how it relates to cognitive psychology and watch them draw blanks - despite the fact that objectivism is the root source of much of Rand's observations on economic models and human interaction.

This has got to be a case of fanatics looking for a cause (and someone else to blame), rather than a cause inspiring fanaticism.

Max

Universal Broadband?

[ImaLamer]

Geez man my cousin lived in the downtown/inner city/ghetto area and couldn't get a phone line into his building - no one would install it.

The telephone companies coporate offices are about 10 (actually 8) blocks away. There is apartments 6 blocks away with T1 lines to the highest priced apartments.

The problem is the tax doesn't get paid back. At least the money doesn't trickle down. The problem was that he lived in a building which never had service - they refused to setup the line (drop it into the window?) without funds from the city which "weren't there".

He was willing to pay for everything except what they (the company) has to pay by law. So we collect tax and it's not even paying to get real customers! I feel sorry for people who need 911 services but can't get a phone. It's been ruled here in my city that 911 is a right because it's funded by taxes.

The problem was the pay phone was always being used by crack dealers. But for some reason it was only 20 cents so maybe it all works out?

We just figured the police paid the other 30 cents and listened in...

[the moral of this story is that sometimes taxes are good. if the funds are used right it might get people back into market (or whatever). the error isn't in the amount of taxes we take, the error is that we don't try to stretch it as far as we can. know where investments are[

Re:Phone TAX = Money for School Equipment (ERATE)

[Telemakhos]

I love this -- I'm always impressed with how happily we pat ourselves on the back when schools get The Internet and New Computers, which provide an instant IQ boost to all the underprivileged children. Because putting one workstation in a classroom of thirty to forty kids, of course, is the solution to all our educational woes. Pie jesu, did no one ever realize that forty kids can't all use one computer at the same time? Even if the administration is wise enough only to purchase computers for computer labs, only a fraction of the students can use them at any time. And for what is the web (all we allow the kids access to anyway) useful? Easy: teaching them to "research" by pulling up those dubious sources most attractive to the eye, to ignore the resources of the library, never to read a book, an article, or any literature that might give you a broad perspective on an issue when you can nail a transcribed sound-byte in Google. I am a teacher at a school serving free or reduced lunches to the majority of our population, one "benefitting" from increased penetration of high technology at reduced cost. It never ceases to gall me when some politico or bureaucrat congratulates himself and his corporate sponsors for "bringing computers to the classroom" and hooking up the school to the internet... gee, now the kids can look up video game cheats and the prices of tires and rims, but they still can't write a thesis statement or multiply two numbers in their heads.