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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
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
Who's with me? I can see the pile in the middle of bay now =)
Stranded.org
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!
Is it about connecting phones with phones? Or people with people?
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 about to say that this isn't a socialist state and I don't give a flying hoo-hah if low-income rural subscribers can't get cheap cable.
Fortunately your government disagrees with you on both points. That's why you have libraries: education and access to information to people who can't afford it. That's why public school is free. That's why you have a welfare system. That's why you have food stamps. That's why universities have scholarships. How on earth did you get the impression you didn't live in a socialist state? What country do you live in and unless the US has eliminated all the above, don't say the USA...
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."
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*
...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.
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.
Have to go devil's advocate here for a sec...
"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."
School internet connections? Schools in this city first need a) usable hardware, b)knowledgable, decently paid teachers and IT staff, and c) an actual use for the internet in their curriculum.
Library internet access? So we've settled all those issues about recordkeeping, privacy, restricted content and so on? Good to hear.
Low income subscribers? Low income _cable_ subcribers? So cable tv/modem service is a right now?
Health care? That's just a weird place to fund health care from. They use up all my cigerette taxes that fast eh?
Rural access is less worthy? And why is it that much more expensive anyway?
Just what the weak economy needs, more taxes.
"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...
Now, what was that you were about to say?
Only this. Taxation without representation. These taxes are not approved by Congress. They are determined and levied under the sole authority of the FCC. That is why they are referred to as a "stealth tax".
Furthermore, as I managed the implementation project for a major municipality's E-rate project, I can tell you that the 55% in question breaks down as follows:
All this was done "for the children". Within months of implementation, the system collapsed because of the lack of a maintenance staff. The function of the project was immaterial. Once paid for, it had accomplished what the politicians wanted it to do.
E-rate, like all gubmint programs I've ever known anything about, is a social edifice whose purpose it is to make money disappear into political payola and dirty back room deals. Yet another example of how it isn't the type of government that gets you, but its size.
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.
"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?" ...and 100% will go right back into the pockets of the big monopolies. Whom do you think is going to get these taxes? Sure they will go toward providing "services" at a "fair" price for the poor little children. But surely the companies will be given a market rate for their services which are being mandated, one for which they will profit.
This is just another case of power hungry beaurocrats and money hungry monopolists feeding eachother. Yet another government subsidy of big business.
Please nobody forget that taxes are when people are forced to pay for something they wouldn't voluntarily pay for... if someone came to your house and took your money without your consent, then I think even the most maleable among us would be offended. Why is this money grab any different? You say because we elected them... that we collectively have chosen this?
No. Democracy thrice removed is not democracy. These people are thieves pure and simple. They do not represent me, any more than they represent you. They take our money by force and hide behind promises of job creation and benefit to children and the poor, but no good can come from a thieves gold.
Sure we have a choice to pay for these services or not... to participate in society or to not. To pay taxes or to not, but what choice is that really? Not a free one.
In my area free school access is just part of the price cable modem providers pay for cable's right of way. School access doesn't really cost much of anything for the providers beyond the istallation, so why not just mandate it from the monopolies? By my accounting it would take just a couple hundred subscribers in a community to easily defray even the commercial cost of educational access, let alone the real cost. Education access in exchange for right of way is a fair bargain, an exchange of value, not a theft like these proposed taxes and many others
Eventually this corruption will stop, either we will put a stop to it or it will stop us, but it will stop.
SVM, ERGO MONSTRO