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Cable Modem Tax Proposed by FCC
TheSync writes "News.Com has an article by Declan McCullagh that says the FCC is considering a new tax of up to 9.1% on the revenue of cable modem providers. This is an expansion of the existing universal service fund, which currently does not apply to cable services. The USF could even be expanded to wireless IP and VOIP providers as well, expanding the fund to over $13 billion."
Well, I can't really say that this surprises me and as much as it may suck that my cable bill would go up, at least the money is going to some somewhat good causes:
About 85 percent of the fund's revenues are split between two causes: the "e-rate" program (40 percent), which subsidizes school and library Internet connections, and rural telephone companies (45 percent), which might otherwise end up paying more for telephone service than city dwellers. The remaining 15 percent goes toward discounts to low-income subscribers and funds rural health care.
I have often regretted my speech, never my silence.
-Xenocrates
About 85 percent of the fund's revenues are split between two causes: the "e-rate" program (40 percent), which subsidizes school and library Internet connections, and rural telephone companies (45 percent)
How is this a bad thing?
I know if you contact your cell phone provider monthly and tell them you arent paying the FCC excise tax, they will take it off your bill, I dont see why it wouldnt work here. Its a tax on the provider, you dont HAVE to let them shift that burden on you, and since most of the plebs out there dont know to do this, they wont up their prices to compensate.
We have seen that living things are too improbable and too beautifully "designed" to have come into existence by chance.
Is it about connecting phones with phones? Or people with people?
hey buddy. I would like to tell you that pres. Bushs tax cuts help me very much. And I am very far from rich. Maybe you should stop believing everything those dumbass democrats say and read the stuff for yourself
"That wasn't an attack. It was preemptive retaliation!"
This news comes at a time when DSL prices are beginning to be slashed. Verizon has lowered their service costs by upwards of 30%, while SBC offers promotional offers.
I switched to SBC/Yahoo DSL last December, and I pay $39.99/month with the promotional offer. The same service is now being offered at $29.99.
If cable providers are forced to increase rates, I'm sure DSL companies will be willing to lower costs (at least for an extended period of time), in order to drive potential customers away from cable.
Of course, Earthlink DSL has announced that they are actually increasing rates; but that doesn't affect much of the broadband-aware states that have signed the Internet Tax Freedom Act. Including my state of California.
*BZZT* Thanks for playing..
:(
I recently received an email from Earthlink stating that they were going to start collecting "additional taxes and fees" from DSL users.
An article ("Earthlink yields to net taxes") on MSNBC recently detailed some of the information. From the article:
EarthLink on Tuesday said it will stop picking up the tax bill for some dial-up services and its digital subscriber line (DSL) broadband services, resulting in higher bills for many of its customers.
The taxes will affect dial-up users in states that are not subject to the Internet Tax Freedom Act--namely New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas and Wisconsin. States that have approved the act exempt users from paying taxes for most Internet access and transactions.
Earthlink's Frequently Asked Questions about DSL Taxes and Fees also contains links to tax tables for home DSL users and business DSL users. I emailed Earthlink using their special tax questions form asking if they were going to start collecting fees from cable modem users. This is the reply I received:
Dear Valued Customer,
Thank you for contacting us.
No, the taxes do not apply to cable users, as EarthLink does not handle
the billing for cable accounts. You may want to check with your local cable
company to inquire about taxes for cable service.
Gregg L.
Electronic Support
EarthLink, Inc.
Why Wait? Move to EarthLink.
CSR ID#: 989
Case ID 26018934
I was considering switching to a cable modem until I saw the cable modem tax article this morning.
...or at least, that's what my employers at the phone company have told me. At least insofar as we pass it on to the customers, it's a surcharge, because the govt doesn't charge the phone customers directly--it charges the telcos, and we have the right to decide to pass that on to our customers or not.
And incidentally, it could be higher than 9.1%. Until a few months ago, it was 10.5%. It's currently 9.1% for residential customers, 9.3% for businesses.
Editor Emeritus and Senior Writer, TeleRead.org
It's important to note, as the CNET article does, that DSL service is already subject to this tax, and the change will really only put DSL and cable on equal footing. Seems reasonable enough to me, especially considering that, at least in theory, the money collected goes toward things like providing internet access for libraries and whatnot.
The Universal Service Fund is extremely important because it will help make cable available in rural areas that are better serviced by wireless connections. The people in these rural areas that are better serviced by wireless deserve to have the option of DSL and cable. Isn't this the fundamental foundation of a free market? That is everyone in every market should have the same options regardless of the cost of serving that market? The alternative is the unthinkable option of people on farms just having cell phones, satellite dishes and wireless connections to the internet just because that is the most efficient way to provide service.
The harder trick, of course, is that people in the city should have equal access to wireless. However, since there are more people bidding to use the available bandwidth in the city it is cost prohibitive. So, what we need to do is add a Universal Service Fee to the wireless internet in rural areas and use that money to subsidize wireless connections in the city. It is only fair. This is another example of how taxation helps make the free market free!!!!!
Just what the weak economy needs, more taxes.
What the weak economy needs is more liquidity. By putting money in the hands of people who will spend it (schools, poor people, rural folks, and the government(yes they are very good at spending money)) we are creating that liquidity. And believe it or not that money WILL end up back in the hands of the rick! Thats right! Give someone who has nothing $100 and they will BUY SOMETHING!!! And they will buy it from someone who has more money! By redistributing some of the money the higher classes get to the lower classes the economy is actually boosted and the rich actually get richer!
I believe it was Warren Buffett who said the recent tax reform would give him an additional $310,000,000 annually. That is rediculous. He said himself that it would make much more sense to give 1,000,000 people $310, and as far as I can tell he is a pretty bright man when it comes to the economy.
Visualize the world of wine
"The share of all individual income taxes paid by the highest-income 1 percent of households was 36 percent in 1998."
"the top 5 percent of households pay 56 percent"
"In 2001, 36 percent of U.S. households, most earning less than $40,000, had income tax liabilities of zero"
Yes that's right, 36% of households pay NO income tax!!!
Would you like their tax rate to be below 0%? For many of them it is, in the form of the EITC.
Whenever the offence inspires less horror than the punishment, the rigour of penal law is obliged to give way...
Have you looked at earthlink? in MA they resell comcast cable service. it might be cheaper for you as a modem owner and as a non cable tv subscriber
Why are you taking dollars out of poor farmers pockets just so you can eat cheap? I see no reason rural folk should be expected to subsidize you cityslickers' meals.
The agriculture industry *is* heavily subsidized, but the effect you describe is exactly backwards.
The U.S. government often pays the agriculture industry to either destroy their yield, give it away to 3rd world countries, or to warehouse it and not bring it to market in order to keep the supply lower and maintain a "healthy" price in the marketplace.
So us city-slickers are getting it from both ends. Farmers overproduce themselves into oblivion (supply greatly exceeds demand, driving prices to the floor). To "fix" this, our tax dollars are being *given* to farmers who overproduce, and at the same time, this gift results in higher prices for us at Safeway, Albertsons, QFC, etc etc.
U.S. agriculture benefits from subsidies at a cost to urban centers, not the other way around.
I used to be the Technology person for a rural school district covering 3 counties serviced by 4 phone companies. About 1995. We still had PULSE dialing until recently. We couldn't get a trunk hunt for our modems unless we could find a block of physically adjacent unused switches at the local Telco for our modems.
It was supposed to be an internship but the real Technology Directory died shortly after I hired on so it became a paying position for a year or two during college until someone else finally got hired so I could get back to my classes.
The USF was used to help us pay for upgrades to our community and schools system. The amount of money put into our programs was based on the number of students on the Federal Free Lunch program. About 60% of the kids back then. I don't know if that's how it's done now, but there is no way we could have had any service for schools, libraries or anything back then without it.
You get less. 24K dial-up, if you're lucky. Not even 14.4K, if you're not. DSL? fuggetaboudit. Line noise. Frequent (and longer) outages. Overloaded exchanges (can't get a dial tone).
Does cellular makes rural land lines obsolete? Think again! Go off the well-beaten paths and the cellular coverage is gone.
You may see the universal access "fee" as a subsidy, but we rural residents know it for what it is. A tax . The money goes one way (to DC), and we get lip service in return. From all the major politcal parties.