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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."
These assholes already have forced my DSL provider to bill me for this, never mind that there's no phone service going over my data line (right now). To force this for cable as well is insane.
7 November 2006: The day Americans realized corruption and incompetence weren't addressing 11 September 2001
Before the rants get too intense about this being a corrupt violation of your rights (read: making you pay for something) you should read the following from the article:
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.
Yes, that's right. 55% of this tax will go to school internet connections, library internet access, and low-income subscribers and health care. 45% goes to the somewhat less worthy but still valid rural subscribers to keep costs equitable. Now, what was that you were about to say?
Exactly the initiative that the government needs to take for breadband to become widespread. Noting like an extra 10% added on to the cost of something to get people to buy it.
As if I don't pay enough for my cable modem already ($40)
In my Area, $40 is just about the cost it would be for me to get another phone line and an internet account. So it is very much worth it to me to pay the $40 for a cable modem.
As for the FEE proposed, it would almost certainly be lower than the 9.1% listed, but I don't think it will go through in it's current state.
The FCC would have to reclassify cable access or the measure would give a broad scope of who pays the new fee, all the way down to people who use an ATM machine.
Do you Gentoo!?
Just like the phone companies, these taxes can be used to bilk the customers. As you get more and more line items on your bill-- taxes, fees, etc... the provider has more room to inflate the bills with hidden charges. More than one phone provider and companies with access to bill phone providers have been accused of including obsolete, illegal, and fraudulent fees on phone bills. Are we seriously supposed to beleive that cables companies won't do the same thing?
g .h tm
Phone bill fraud by third parties:
http://www.fraud.org/tips/telemarketing/crammin
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
They take X dollars earmarked by this Fee/Tax and apply it to Y, while giving the X dollars which used to fund the program back to the general fund to spend elsewhere. It's a bait and switch that leaves the "needy program" funded at the same or marginally higher levels than before the Fee/Tax.
For a great example of this, look at how the states "fund" education from their lotteries. It's a scam.
Why should rural dwellers get help from the rest of us on paying for their phone connection? Living in rural areas has both advantages and costs. You get the advantages of clean air, uncrowded living, etc., you should also pay the costs if it's a little more expensive to string a phone line out to your place...
This could force state level corporation comissions to treat broadband service the same way they do telephone service and electricity, as a regulated service. This could go toward requiring service availability if others in the same geographical area can get service, instead of hiding behind "bad cable" or "pair-gain" (for DSL folks). It would also possibly allow for more grounds for suits against poor providers, legitmizing the entire industry yet slapping it around a bit.
Do not look into laser with remaining eye.
the idea behind the universal service fee was originally to provide basic telephone service
Cable modem doesn't fall unnder my definition of "basic telephone service". No way do I buy that internet access is the same sort of necessity. Got your leg caught in a thresher? My first reaction would be to pick up a phone, not a cable modem. It's just not a necessity. So much so that I'll gladly drop it if this tax materializes.
How about a Universal Housing Fund, so that rural people can help pay for some of the outrageous apartment costs in the city?
The fund might have been important years ago when there were areas of the globe that were threatened by a lack of telecommunications, but now with cellular towers going up everywhere one can only consider the fund an anachronism.
It costs 1400 dollars per month to rent the tiny apartment above ours. Out in rural California it was 600 dollars to rent a huge house. A few more dollars are going from my TCL to subsidize someone else's, who lives for half of what I'm paying?
I'm all for taking from the rich to give to the poor, but I don't think this is the most direct way to go about it.
The ______ Agenda
Actually, I'm not complaining at all... I'm very happy with my $40 T1-speed downloads.
I can't really include my cable TV bill in with my Cable internet bill because #1: I could get the Inet without the TV and #2: I use my TiVo to watch all the TV I can fit in =)
Do you Gentoo!?
That would imply that schools need Internet access more than additional teachers. NOT!
So basically I'll have to pay a higher bill and children instead of getting a better education and learning the fundamentals will get a computer thrown in their face.
Sorry but kids don't need computers as much as they need traditional education.
If you wanna get rich, you know that payback is a bitch
Michael Powell is not part of the administration; he is (nominally, at least) independent, and was appointed by Clinton.
And I've never quite figured out how "not taking as much as we used to" and "giving away money" are the same thing, no matter how many times the Democrats have tried to explain it to me.
If it ain't broke, you need more software.
When I signed up for AT&T broadband, the pricing was $34.95 for service, $10.00 for modem rental. I bought a modem, so my monthly bill was $34.95. After 6 months or so, ATTBI decided to restructure their pricing to $42.95 for service, $3 for rental. In essence, they were extorting an extra $7 per month from their most loyal customers (the ones who made the investment in hardware) while not affecting the renters who had no financial investment and could leave at any time.
Then along came the Comcast buyout of ATTBI. The very same week, I got a letter from Comcast alerting me that they had noticed that I was a cable internet customer, but not a cable television or long distance customer. As such, my broadband internet price would jump from $42.95 to $57.95. That is, of course, unless I opted to sign up for their cable television service, in which case I could keep the "bargain" price of $42.95. I don't want Cable TV (hell, I know I already get it due to the way the technology works).
So my cable bill has made two jumps since January, from $34.95 to $42.95 to $57.95. That's a total increase 65.8% since then! 66%! Why did my bill gone up 66% over four months? Did the cost of providing me that service really go up that much?
Add 9.1% to $57.95, and we're up to $63.22 - that's an 80.90% increase in the cost of my service since last December!
Imagine if the cost of everything else went up 81%. That $20,000 car would be $36,200. A gallon of milk would jump from $1.50 to $2.72. Gasoline would jump from $1.60 per gallon to $2.9 per gallon. And my sallary would increase by roughly 2%. Now, I'm not an accountant, but I think I can see that if my salary increased by 2% and the cost of living increased by 81%, I wouldn't be doing too well.
How are you going to keep them down on the farm once they've seen Karl Hungus?
The people who need the money the most are the people who are unemployed. When you are unemployed you have no income, and hence pay no taxes. The only way to help those people with a tax cut is to cut taxes of people who will either:
If you're one of the 8% or so of people out there in the US with no job, that's the only kind of federal tax cut you should be looking for, because it's the only kind that's likely to have any chance of helping you.
Cutting taxes for people with low income won't help the unemployed people because the money will be spent on retail items that will probably come from China given our current trade deficit, so while such a tax cut might help those low income people, it won't help the economy or the unemployed.
All that said, I think this most recent tax cut is stupid. It's not the tax cut Bush asked for, and because it was renegotiated to go more to the lower end of the income scale it's essentially $350 million flushed down the giant hole that is our trade deficit.
Fair enough. You choose to live in an area where telco services may be more costly than in another area. Fine.
Then you pay the extra costs of where you choose to live.
You have a larger, more expensive home than I do. Why should I pay part of your costs?
And how are the rural dwellers going to make money to pay this fee? There's no Corporations to employ them. No Walmart for them to get jobs as greeters. Look up "subsistence lifestyle". Most of your food comes from hunting and gathering.
Just because your parents choose to live like this, should you be penalized? How is a rural kid going to get a job in the "civilized" world without some experience with computers and the internet? How would they apply for scholorships and college?
You aren't thinking rural enough. Try rural New Mexico, or Montana, or (best example) Alaska.
Because they are indistinguishable from one another in terms of what they do; They provide a transport for streams of data broken up into packets. In fact generally speaking they both only carry IP traffic (though they CAN carry other types of data; It is my understanding that DSL is just a flavor of ATM, even... I'm not sure what DOCSIS is based on) so they are even more similar to the user. Either one can be used to carry all the same types of data, which is to say, basically anything.
As for what should and should not be taxed, the law definitely should say specifically what makes a service taxable. If you can't put it in simple objective terms then there's no justice in it, because that is the only way you can make the law apply to all equally.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
WHY does the government feel it is important to manipulate the market prices for these people?
Because it's very bad politics when a six year old has to run two miles down the road to the nearest phone to tell the operator that his house is on fire and his parents are trapped inside.
free markets don't require "everyone in every market regardless of the cost of serving that market". Free markets are free of regulatory restriction and provide whatever service the market will buy, at whatever pricepoint the market will buy it at. If the pricepoint the market is willing to pay is less than the cost to provide that service (like wired rural broadband), then a free market would suggest that said service shouldn't exist.
That said, I support rural broadband, but think that wired rural broadband will not happen in a free market for a long long time.
Since the 6+ billion people on earth generally agree that coming after people with guns and blades is morally unacceptable, the government comes after your wallet. "If we can't kill you, then you've gotta pay us more!"
But, then again, those of us who bother to read up on our history know that a government will tax any thing that moves on its own for anything that doesn't.
But, for the love of God or any other high (or low?) being, don't stop paying. If we stop greasing the wheels of government, it will be forced not only to fight even more wars that we don't agree with, but even to turn on those it is sworn to protect... (This, my friends, is why tax day feels sort of like a very uncomfortable physical examination. You hate to do it but you know it's best for everyone involved, especially the one collecting your money!)
But what you are talking about is a rural poverty fund, not a rural service fund. I know many rural dwellers who make a good living, and many rich city-dwellers who keep rural houses for vacationing.
Haphazardly giving money to phone companies as compensation for a mandate that they serve everyone isn't going to help that subsistence farmer who can't afford to pay 30 dollars a month for a phone bill anyway. Likewise, there are many kids in the city without access to technology and whose families regularly appeal to my grandmother's church for help paying for electricty and water bills, let alone phones.
The point of the original bill was that the cost of service for those who can afford it should subsidize those who cannot. The current system does not do that, and should be changed.
The ______ Agenda
Free markets are a way to provide to the consumer the most cost-efficient solution.
Cable modems are most certainly not the most cost-efficient solution for rural areas.
If cable companies were to service rural areas unsubsidized, then they would have to charge extremely high rates, in which case the rural areas would simply use satellite.
Satellite is the best solution for rural areas. Don't charge the rest of us unnecessary taxes to solve a problem that doesn't exist.
social sciences can never use experience to verify their statemen
I will agree to pay this extra fee if, and only if, two things happen:
1. Prior to charging the public any extra fees (taxes), the telcos, and all associated parties, publish a plan to distribute $12,999,999,900 [a]. of the estimated $13b that will be collected
No extra admin costs, no profit taking, no fund redirection. Each and every $$ collected must go towards the stated goals of the Universal Service Fund
2. All of the associated telco CEO's, and the FCC Chairman, agree to prison terms [b] not less than 6 months, and not greater than 24 months if it can be shown that they do not follow their published plan.
Prison terms are collective, in that if one falls, they all fall. Make them accountable to, and responsible for, each other
[a] Each Telco may keep $1 profit each for administering the dispersal of our funds.
[b]Federal PMITA prison, not 'house arrest'.
democrats and republicans : they're what stand between you and your money.
STOP ELECTING THEM.
And I don't mean by NOT VOTING either. Vote third party. Preferably, vote Libertarian. If you don't like them, vote for just about anybody but the big two.
Send a message.
Ok, first, if his house is on fire and there's no other house for two miles, having a phone inside the burning house isn't really going to help him...
Second, using the necessity of basic phone to justify a different subsidy doesn't seem right.
-- Don't Tase me, bro!
Or, like you said, are only "incumbent" telcos allowed to sit at the trough?
:-) aww... restating revenues is something everyone does!), the problem is that this avoids reality. In the upper midwest, we've had incumbants actually threatened with license recovation because they refused to deliver a single T1 to a commercial entity in an underserved/ignored market. In Qwest's defense, they have so many major fires, that a little town of 2,000 people is something it just something it doesn't have time to worry about. "Ignore them and they'll go away" is the new operating statement.
It's sort of a public relations vs. reality issue. The fuzzy program materials sound great. In fact, programs such as the farm bill and RUS grant/low-interest loan provisions have gotten so many folks excited about easy money that I've had 3-4 calls a week from startups, angels, small communities, etc. that want me as a partner to obtain some of this money for their project. (One two weeks ago had already started hiring technicians to get going, you know - step 1. fill out RUS low-interest loan app, step 2. ???, step 3. make billions!).
The reality is much different and clearly benefits the incumbants. RUS, for instance, specifies capital reserves and other operational details that are structured towards a certain kind of operator (hint: incumbant).
We monitored the farm bill/broadband process very closely. Without giving my location away, I'll say that several board members have good contact with a key driver of the farm bill. Always, the devil's in the details and when the rules were finally published, the details were written to benefit incumbants. (Not that I would defend this particular Senator, but he didn't write the rules that gave away the store to the incumbants).
While I can understand the argument that "incumbant = low risk" and better track record for integrity (like Qwest?
The smaller incumbants have another equally troubling issue. While they're more engaged with their community and usually do care about the local people, they're terribly incompetent. They have an aging engineering staff that's eyeing retirement, have avoided infrastructure reinvestment for 20+ years, and quite simply do not understand wide area carrier networks. To them, a AT&T Internet T1 + DSLM = broadband for thousands. In their defense, a one to a dozen market incumbant is a post-regulatory oddity that survived in spite of evolution. You can't expect to be competitive on this tiny scale. A Cisco CCIE should be handling a region as large as a state (and needs the portion of revenues from that area to be cost-effective). So they don't have CCIEs. They've got guys who used to repair tractors working as router "experts." Seriously... one competitor's top engineer also maintains the fleet vehicles and is the groundskeeper as well. Need I say "DHCP enabled on a wireless AP serving a community on an omni antenna"? Ugh!
Please understand I'm not whining about the Federal loans/grants - I don't take any of it because I know better than to ask for it. It's not intended for me, as I don't pay an attorney in DC thru the various ILEC/RBOC lobbying firms. I don't aspire to receive this money either, as the price I have to pay for it (regulation, political donations) is not acceptable.
But to tax my small town customers and punish my business under the guise of "helping incumbants find a way to provide broadband to small towns" is criminal and is a very good way to turn red fly-over country blue (god forbid). If they really wanted to figure it out, they'd sell the house in Vail, drop the country club membership for upper management, and tell the five engineers that serve one small town that they need to produce or get the boot.
And the FCC had better remember that right now is a really bad time to put a tax on these small town folk. They don't have the dollars to give, and you can expect I'll let them know who added the tax.
*scoove*
Telephone poles are not cheap. Manpower is not cheap when the poles are knocked down, ice stormes, etc need to be repaired.
In the city, the cost per customer is probably still cheaper even with the newer technology.
it's not that it costs them more. it's that the telephone companies won't run service out that far without proding from the government..
I post links to stuff here
Not as long as Comcast's AUP forbids 'running servers' and blocks inbound port 80 / 443 / 23
Nope. If I can't use common services, it ain't broadband.
And I've never quite figured out how "not taking as much as we used to" and "giving away money" are the same thing, no matter how many times the Democrats have tried to explain it to me.
If you tell a friend that you are going to buy him a $50,000 car, and then later you only buy him a $30,000 car, haven't you just stolen $20,000 from your friend?
That twisted logic is similar to explaining why "tax cuts are gifts to the rich." Wow, the government letting you keep more of your own money is now a "gift." It's amazing how warped some peoples' thinking is.
When an evil republican wants to reduce the rate of increase in spending on a particular program, it's referred to as a "draconian cut." Or "slashed" or "gutted" or pick-an-adjective. Spending still goes up, just not by as much, and it's referred to as a "cut." The mind boggles.
Of course, these are probably the same democrats that referred to the Clinton tax increase as "contributions."
And just how would the Libertarian party (or any other third party) do any better? They'd slash taxes, but to do so they'd also have to slash spending. Yeah, there are plenty of things in government that need to be cut, but getting a bunch of people to agree on a list of which things those are is outright impossible. (Just try to talk about eliminating NASA around here...)
Running a government isn't as easy as it looks...
Same reason there's a special Second Class postage rate for newspapers. Same reason postage is the same to cabins in Idaho as it is to the Memphis airport. Communications holds a country together. Isolation can breed separatism.
SVM, ERGO MONSTRO
if you want to kill consumer level broadband. The government shouldn't be allowed to regulate anything that they don't understand....
Yeah, cut taxes for the rich and they will spend it on American jobs and improvements. Sure they will.
Do you live in the US? If you do, and you're employed, take a look at who writes your paycheck. It's probably some rich American guy. Which would you prefer, a few extra dollars a week, or no fear of being laid off soon? The types of jobs that can be farmed out of the country are a small percentage of the overall job market here, and tax cuts can be made to favor those types of businesses. How about a payroll tax cut for manufacuring companies? Sure, it would be considered a tax cut for "the rich", but you'll never convince me that the extra money wouldn't be used to hire more workers in this country. My family owns a manufacturing business, and I know for a fact that if their payroll taxes were cut every penny would be spent on additional local labor. Even if it wasn't all used for that, it's likely that a higher percentage of it would be spent here than if the same amount of money were given to cash strapped consumers who are vertually guaranteed to by inexpensive foriegn goods...
If you want to stimulate the economy with a tax cut for low income individuals, you have to give them some incentive to keep the money in the country. If you can find a way to do that then I'm all for whatever kind of tax cut you want. Otherwise, if you want to give government money to people who are unemployed you may as well start some "New Deal" style government work programs. Being wishy-washy won't get us anywhere though. It'll just give people on both sides of the issue ammo for the debate about who's economic policy sucks more.
Sounds like the Libertarian party to me.
The problem is that you have to have some taxation. What else are you going to pay your standing military with? Donations? That's a great idea. Considering the American propensity to donate to worthy causes we might have an army strong enough to hold off an invasion by Paraguay.
Yes, taxes are evil, but they are often a necessary evil. I'm not going to go into whether this particular tax is necessary or not. There's plenty of people making arguments for it and there are some making arguments against.
As for your statement that getting conservatives into office would help reduce the tax burden, and at the risk of flame baiting, what color is the sky on your planet? Yes, conservatives can be expected to cut back on social services which would typically reduce tax burden, but they could also be expected to ramp up our military spending which had been drastically cut over the preceding 8 years. Where did you think the money to do that would be coming from?
More information on the Universal Service Fund can be found at http://www.fcc.gov/wcb/universal_service/welcome.h tml.
Short answer is "as long as you meet restrictions on delivery, you can qualify". The pie is getting larger, but the number of "diners" is increasing even faster. As scoove said, there are lots of people interested in chasing the "easy money".
Put a tax on a technology in a sluggish economy.
I'm in the wrong business. I wish I had the power to make dumb proposals such as this.
10% tax on Espresso and Bubble Tea!!!
Dolemite
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