Slashdot Mirror
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
deserve's got nothing to do with it...
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
God, I wish I could get a cable modem that cheap! Gotta love legal monopolies, dontcha?
"Times have not become more violent. They have just become more televised."
-Marilyn Manson
Who's with me? I can see the pile in the middle of bay now =)
Stranded.org
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.
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?
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!?
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.
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!
Is it about connecting phones with phones? Or people with people?
I canceled my service
$59 for the service
$5 'rental'
Yuck
I signed up when it was $39.99 and FAST and the modem was free.
Its gets slower and slower and more expensive.
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!"
Which, if you think about it, means a greater usage of broadband and an incentive to unroll ever greater bandwidth.
I know that after starting to use broadband I'd never think about going back. It's almost required on the Internet nowadays. Anything that brings it to more people is a good thing.
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
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.
I was just sitting around the other day thinking, "Damn, I'm not spending enough on my cable modem access to the internet!", but what can I do about it. Then out of the blue comes my salvation. Thank you FCC, Thank you.
Shop smart, Shop S-Mart.
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.
From the article, "If they want cable modem services to pay, they have to decide how to avoid sweeping in all other information services as well," Boothby says. "That's really the point. How do you say an information service like a cable modem has to pay, without saying that all other information services have to pay? And (how do you) do that in a way that survives court review?"
As much as it pains me to say this, I think its time that internet access be classified as telecommunications. The medium is an active system whereby users exchange significant amounts of information in the form of e-mail, instant messengers, and other means, as well as purchase any number of items. The difference between an information service and telecommunications is in the exchange of information. An information service takes a small amount of information and gives you lots, but a telecommunications medium is primarily about the exchange of information and ideas.
Unfortunately, I don't know what obligations this puts on the access providers, but I think its time the issue was reconsidered.
Besides, this would eliminate the need for taxing telecom providers and a specific category of information service.
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.
"Under the spreading chestnut tree, I sold you and you sold me."
While you guys gripe about cable internet costing you ~$40, I'm still paying around $70 for my DSL (I count the phone line I have to buy and never use here).
I like this part of the article:
"One important point to note: If the FCC goes ahead with its proposal and cable users end up paying more in taxes, DSL users will end up paying less. Because more people will be contributing to the same $6 billion fund, under FCC procedures, each person's contribution gets reduced. So, while DSL taxes currently are 9.1 percent, that rate could fall substantially."
*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.
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.
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.
Actually not.
My company serves rural midwestern markets (largest town is 8,000) exclusively. We receive no federal subsidy (why? we're not a incumbant local telco, or rural utility service, which most of the rules are structured to and were designed to keep younger companies absent subsidy). We do serve 1/6th of one state and should cover 1/3 in the next year. We're privately funded, profitable, and provide a service that nobody else can match in our markets (for a good price).
While the incumbant aka lethargic independent telcos and Qwest ignore these markets, we're there providing this important service. Their product? 128 Kbps DSL, fed by a single T1 for an entire community resulting in un-broadband (sub-200 Kbps). Ours is SLA'ed, 256 to 6 Mbps customer links standard in the product line. Private backbone, and 100 Mbps upstream. As usual, this private business has had the incentive to provide a better product at a lower price than the "fat, dumb and happy" incumbants. And no, we don't have a $5 million vacation house in Vail or a Gulfstream as part of our expense structure.
So what does the FCC propose? Tax us and our customers to put money in the pockets of the RBOCs and ILECs. To buy more Gulfstreams and vacation homes for the FDH. Oh, and to ensure greater political contributions from the incumbants (the real story here).
Just like a chapter out of Atlas Shrugged...
*scoove*
...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
...they'll create another. Gee, and I thought that getting some conservatives in office would help lower the tax burden. Pussies. Flat out, wimpy-ass pussies. We do need a big third party, the "I got f'in ballz" party. Cowering, pussified republicans. Serves them right for letting themselves get walked all over. ::sigh:: Maybe I'll change my party affiliation to "independant".
-- Liberalism is a mental disorder.
I wouldn't mind paying that. I can't get friggin broadband, and satelite SUCKS. (I even tried that, and was sadly disappointed when the upload was only 2kbps) Hell, I tried every kind of broadband service out there, and none of them work in my area. I even begged the cable company. They won't run me a cable, even if I do pay extra. If the government would add service for poor 'just out of reach' consumers like me, then we (the just out of reach) should have to pay a little extra. I don't think the general public should have to foot the bill though.
Speak for yourself.
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.
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.
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!!!!!
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?
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.'"
"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...
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!)
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'.
While we're at it, it has come to my attention that geeks and hackers are woefully underrepresented when it comes to supermodels dating choices. I propose new legislation that mandates that at least 15% of the men any US supermodel dates be a computer geek, hacker, or at least some form of social misfit. After all, what is government for, if not to even out the horribly unfair hands that fate has dealt us?
"Freedom means freedom for everybody" -- Dick Cheney
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.
75-100 years ago, when most of America was rural, subsidizing services for rural people was politically expedient and helped bridge a pretty large technology gap between rural and urban.
I don't see the need for it anymore. Basic technology infrastructure (dialtone, power) has already been built for rural America and has been for some time. Why should we urban dwellers continue to subsidize a built infrastructure? And it's not like it's helping get DSL or any other expensive last-mile technologies to farmers, anyway.
At some point, it's necessary to just tell people that *yes*, if you live in extremely low-density areas it is VERY EXPENSIVE to provide you with technology that has a measurable cost per FOOT, let alone mile. It seems that we're actually subsidizing a rural lifestyle that some people choose to lead (or choose to continue leading). If you want the technology at an affordable cost, you need to go somewhere it's affordable to deliver.
Or maybe we should start taxing off-road vehicles owned by rural people so we can build an affordable infrastructure in urban areas for urban people to use off-road vehicles. Urban people paying for rural people to have urban lifestyles is just as ludicrous.
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.
~"In 2001, 36 percent of U.S. households, most earning less than $40,000, had income tax liabilities of zero"
And how many households that earned MORE than $40,000 had Income tax liabilities of zero?
How many Large Businesses has zero or even negative tax liabilities? Enron anyone? in 2001, the government owed Enron money.
"the difference between myself and a madman is that I am not mad" -Salvadore Dali
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.
..who have $300 million dollar arenas that are partly paid for by the state. Most rural people will never even see your damn arenas/stadiums/fields and they have to fork out money to pay for your entertainment.
This also applies to all the tax that has to pay for government workers that demand higher salieries to live in your city because of the cost of living.
And don't even get me started on trash. Do you realize how much trash a large city produces. Do you know where it winds up going?? Rural areas.
So don't be so conceited as to think that this is a one way street. We have to smell your shit and give you money for entertainment at the same time.
People who live in rural areas generally move there to get away from other people, enjoy a life not driven by technology, and own large tracts of land at rates next to nothing.
This means they have to pump their own water, dispose of their own trash, take care of the septic tank, drive on gravel, cut wood, fill the propane tank and sometimes even generate their own electricity. This is the price of living on land that only costs $2000 per acre instead of $200000 per acre. If their only internet connection is 256k via sattelite with a half second latency, then boo-hoo. If they want convience, they would live within 10 miles of a Walmart, not 100.
When I can pick up a quarter acre worth building a house on in the city for $5000, then I'll feel sorry for the people out in the boonies.
For now, I pay the extra to live in the city (and thus alot more property taxes too). I like being near a 15 screen theater, amusement parks, hundreds of restaurants, multiple shopping malls with 100+ stores each and a gas station or grocery store on every corner. I like being able to meet people that care about more than hunting and tractor pulls. But I think I pay quite enough as it is.
A USF for people in the ghetto, maybe. Country life is quite cheap enough as it is.
The company I work for uses subsidies to provide better service to rural areas where it would not otherwise make financial sense.
What does this mean? It means that people that do live in the middle of nowhere can get DSL, and other high speed services (such as T1's, etc) -- It means we can provide DSL out of "remote" boxes, that the larger RBOC's ignore... we dont just serve from the CO, we serve from the tiny little boxes on your street corners, etc.
What else does this mean? It also means that the cable companies no longer have a 9.1% price advantage over their phone competitors.... All phone services must charge this. DSL, Phone, etc... so the cable companies have been enjoying 'being out of the taxified circle' and now things are starting to even up.
This is obviously good for our company, but since the tax does go to a good cause, its good for everyone.
Another portion goes to help pay for phone lines for low income housings. The program is called LITAP (Low Income Telephone Assistance Program) -- and it helps poverished families... I can think of a few older women who are handicapped and homebound that this fund helps in our serving areas.
For those of you that suggest "People in the Rural area dont need hardwired phones, they should just use cell phones" are way out of the know. You deserve a swift hit with the clue bat.
1. Cell providers have no interest in serving rural areas... cell coverage in truly rural areas is horrible.
2. Two Words: Lifeline POTS -- The cell phone companies are not regulated in the sense that if they have an outage affecting customers, they pay a fine. Almost all telephone companies must submit performance figures to the PUC of that State -- If they have even a single customer outage of more then 24 hours, you can bet they are going to take some heat for it. This does not include "Designed" services, but regular POTS service is covered by this.
This means the telephone company better get your service working or pay the price. This is done so that everyone has the potential to call 911 in the event of an emergency.
Cell phones have no such obligation, and as such.. you are basicly screwed until they feel like getting to it.
These are just a few of the reasons... I could go on, but these are sufficient to show that the fund does work, and will benefit many people.
I wont even touch on the fact that Public Schools and Libraries that have a hard enough time putting books in the shelves can also help pay for high speed internet, computers, etc. to level the playing field with "rich" schools.
Forum Foundry, Inc.
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.
The "Universal Service Tax" is not a benevolence fund and is inappropriately applied to cable modem or other services.
1) The UST was created to increase profits for "rural" telecos -- few which still exists due to the mega mergers (I do not consider Verizon a rural telco). The UST was heavily lobbied for by legislators with telco ties in the name of the poor rural folks (I am one). However, what the tax actually does is underwrite business costs -- not provide access. It works like this: everyone is taxed for teleco services. The tax is then given to telcos to offset the alleged costs of providing services to rural areas. The telcos continue to collect the funds but stall and complain about the burgeoning costs and delay any roll-outs due to the lack of demand. In other words, this tax has little to do with providing services to rural consumers. It is designed to enhance profits for telcos.
2) In many cases, for rural consumers, cable modem access is the only choice due to the strict technical limitations of DSL. That is, the promised competitivness where telcos will benevolently deliver DSL, and cable companies cable modem options is simply a fraud. Rarely is DSL available in rural areas by a telco (some rural governments are installing their own services). So where is all this money going? Really? I live in a rural area and only have cable as a choice. (I am thankful for it.) If the UST is truly designed to provide broadband to rural communities, I have seen no evidence of it. In the past two places that I have lived, one had cable modems as an option and one had no broadband access (the "local" telco would not even provide an estimate of access due to low demand).
3) In my example, I will actually be paying (as a rural consumer) under the new provisions an additional tax for rural access. I do not see the logic. Who then is defined as rural -- someone who does not have broadband access? The definition is absurd as is the whole UST. I selected cable because DSL is not an option in my rural area even though the FCC insists that it is an option or will be in the near future (oh, let's say by 2009 [no joke, this is the time estimate -- $6 billion per year for 12 years to make this happen--hopefully]).
4) I have not seen one published report that confirms that rural consumers have benefitted substantially from this fund. Not one. I am sure that their are anecdotal cases, but nothing to substantiate a $6 billion per year fund. where is the money going? (Nothign sinister. A simple question.)
5) The funds for schools are also questionable. Rather than a telco lowering costs or providing the connectivity for free to schools, the telcos continue to charge high rates because they know that the costs are underwritten by the UST. Again, money is directly funnelled to the telcos through this program and is guaranteed by the government -- who also legislated that all schools must have broadband. So this becomes a solid profit center for telcos -- government guaranteed money essentially.
My comments may sound sinister, but they are not intended to be so. A lot of legislation is written in this manner -- seemingly benevolent on the surface but in reality, the results are a simple corporate profit center.
It is time to abandon the UST entirely (and make the telcos refund the payments to consumers) unless solid progress is made by telcos in creating legitimate and real universal access in real rural areas.
Nevertheless, expanding the current program to cable franchises is simply absurd. Unless the telcos (who are really only concerned about collecting larger fees from the program -- cable companies are exempt from the funds) can show overwhelming proof that DSL and cable are competitive in a overwhelming majority of truly rural markets (Allentown and Hershey, PA are classified as rural for goodness sakes), the cable modem tax should not proceed. The additional tax will simply increase the profits of telcos but requires no increase in the roll-out of broadband to rural areas.
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
____________________
Save the World! Use a Quote!