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Senate Mulls Internet Tax Ban - VoIP Exempt?
securitas writes "eWEEK's Caron Carlson reports that this week the U.S. Senate will vote on renewing an Internet tax ban, but voice over IP (VoIP) may be taxed. The bill renews a state/local ban on taxing Internet services like VoIP. The federal government wants to define VoIP as a software application exempt from taxes while most states see it as an alternate form of telephony subject to telecommunications taxes. House and Senate bills that define VoIP as a software application have already been introduced but may not be voted on before the Internet tax vote."
how are they planning on enforcing this? It's completley pointless.
For instance, Unreal Tournament 2004 has VoIP functionality built-in in order to facilitate communication between teammates. Might it be subject to taxation?
What about GAIM's VoIP plugins? Or Gnomemeeting/Netmeeting?
Are we just talking about apps that mimic a telephone, or are we talking about all VoIP applications?
I don't trust Congress on these matters. I get the feeling that VoIP will end up being broadly defined and some horror stories resulting from the mess.
I wish I had a kryptonite cross, because then you could keep Dracula and Superman away.
I'm not saying what I think they should do. But I'm going to play devil's advocate and say they might have a point. VoIP isn't the internet. It is a service. VoIP isn't necesarilly an international domain thing. It's really not all that different from any other telephone service. It would be like them placing a 1 dollar a month user-fee on ISP's services. Not the same as putting a sales tax on internet goods, or taxing it based on usage, or charging for e-mails. I beleive the term politicians use is "luxury tax." Would no doubt bring in huge revenues.
Like I said, I'm just playing devil's advocate.
Derek Greene
So.. can I spoof my IP address and get my calls billed to my neighbor??
--
The Marines: The few, the proud, the not very bright. - Slashdot tagline 04/21/05
Skype is a P2P VoIP application that is independant of any central servers, has great quality audio, NAT, etc.
How exactly do they intend to regulate the unregulatable?
Lets see - the large RBOC's and ILEC's have convinced the FCC that UNEP should be killed. God forbid that everyone has access to the infrastructure that your tax dollar helped build. Considering that many of the RBOC's are loosing money on DSL - it makes a lot of sense to not have competition in the area.
These same people have been working very hard and were able to convince some PSC that rate hikes were in order. [This besides the fact that they had highly profitable quarters even during the economic down turn] Thus stuffing the war chests of the big guys, helping them roll out their "loss leaders" in an effort to crush any competition.
Now they are agitating for VoIP with no taxes. Why? Simple. They've finally agreed to come to the party. Many companies have been doing VoIP for some time, and the idea that VoIP would be taxed has been held out, but now that the RBOC's and ILECS all have made major VoIP announcements suddenly we're considering legislation! IMAGNINE THAT!
At VON this year everyone was screaming that the government should take a "hand off approach". This included a rep from the FCC, AT&T legal, california and florida PSD reps. No one wants to "kill the goose that lays the golden egg". From my POV that is ideal. Let us compete and we will crush the inefficient, lazy, technically inept RBOC and ILECS. The problem is that I don't see this hands off approach staying that way. The FCC and california PSC guy hinted that some sort fo universal access fee may be in order. The other thing that was strongly hinted at is that the state's are going to loose a larege source of recouring revenue that they can't afford to loose. so a state tax may be considered.
In the end, I see VoIP taxes heading the same way as our current PSC and FCC. Favor the big guy (ie campaign contributers), and lets not have too much competition. It wasn't more than 2 years ago when somone said that VoIP will take 2 decades to become mainstream. Sprint, AT&T, Bell South and Verizon will all be switching voice at their cores within 7.
This bill is a step in the right direction. Lets see if the congress can keep the playing field even. If they do - the RBOC's and ILECs are in trouble unless they make some fundemental changes to their corporate cultures. I bet they will protect their little fiefdoms - look for modified legislation in the next 12-18 months to give them a leg up. (As if their monopoly's weren't enough)
cluge
AngryPeopleRule
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
Erm, yeah... except that's a four-year-old HOAX!
Karma: Segmentation fault (tried to dereference a null post)
If they tax our electrons, they should be paid in photons!
"Enclosed is my tax payment - you will find 1 blue LED and a battery. Turn it on and let it glow. At the end of the battery life my internet taxes will be paid in full, in several billion photons."
I think you still might be able to pay taxes in live chickens, but
that would be so unfair to the chickens!
...is to use the recent short-range band (Bluetooth, WLAN, direct phone-phone connections et al) to turn my cell phone into a landline w/wireless, when in range. That would be a real boon for IP telephony. VoIP with headset or specialized IP-capable phones have their use, but if you could use any cell phone the market would explode.
Kjella
Live today, because you never know what tomorrow brings
There was just recently a nice article in Forbes about this very subject. Apparently, the local phone companies are scared shitless because the internet is capable of destroying their stranglehold on the telecommunications market.
The biggest problem with taxing VoIP is that you only need to pay for VoIP when calling someone who still has POTS. VoIP-to-VoIP calls are free.
I strongly believe the feds should ban ALL taxes on internet based telecommunications.
The only good benefit we get from the phone taxes is the emergency services connection. That WILL have to be figured out though.
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
All this time we keep focusing on how bad IP law is going to keep us in the technological dark ages compared to our more adaptable evolutionary cousins abroad - but really it's looking more and more like the tax-mad politicians are the true enemies of evolution. It was easy to look at the nonsense going on in India with the government attempting to ban IP telephony and criticise, but it appears our own politicians are determined to prove once and for all India (has) had nothing on us.
You can see all kinds of examples of how, over the years, our lawmakers have tried to govern all kinds of things that they didn't understand. If you want a good example of how the laws governing the internet will look in fifty years, go wander around among the laws governing the environment for a while, or the regulations under which the FDA operates, or anywhere else that the government tries to regulate a scientific or technical issue. These people are lawmakers, not scientists or engineers, and aside from the fact that they simply do not understand what it is they are trying to regulate, they are not really listening to anyone who does understand either. The primary focus of a lawmakers attentions are on their own wallets, followed by those people who see a profit to be made or lost, and lastly by those blocks of voters who might be able to march together under some doomsday banner of dire predictions. I don't want to sound like I'm advocating anarchy, because some degree of regulation is needed on the internet (think child porn or DDoS attacks) but the more we allow the government to regulate, the more confusing and contradictory the regulations will become. Thinking just in this cae, they might tax VoIP now, with half a dozen exceptions to exempt games for instance, only to have to pass new laws later to close loopholes and make new exemptions, until such a time as when a game-maker may need to pay a lawer a weeks worth of wages just so he can safely publish his work. I can only see internet taxes working as an all or nothing deal if we're going to avoid a tax code that would be 10 times as confusing as the most complicated codes we have now. Think some flat (2% maybe?) tax on all goods and services that would be collected by a federal department and redistributed to the states by percentage of what was actually sold in a state. If we just let the lawmakers go according to whim the resulting tax code will choke anyone who wants to do business with or on the internet. Not that I'm fond of the idea of another tax or another governmentl department to administer it.....
... this guy gets paid by the acronym.
___
It's the end of my comment as I know it and I feel fine.
How could they do this without monitoring all data streams extensively, and determing somehow "gee, this is voice and this isn't", etc. And tracing them to individual IP addresses? Just throw some random numbers at the whole internet? I mean, speech (and video) between people over the net has been around a long time, CUSEEME as an example.
This sounds more like some sort of random tax that still won't allow what you want to do with your machine, just like the blank CD tax/fees you pay still won't let you completely off the hook with the RIAA MPAA goons and their pet legislation they inspired, even though it was supposed to.
The only way to keep the net free is just that, no taxes on it for any reason. It's slippery slope, once the government gets a money toe hold on it, eventually it will be highly regulated.
And speaking of taxes and unnecessary fees, why can't we get unbundled POTS yet? Why do I have to pay all these ridiculous fees I see on my phone bill to use a phone line just for the net? I don't use it for anything but net access. I certainly can't get unbundled copper, no negotiations there as far as I know without jumping through a ton of ridiculous hoops and expense. I guess what I am asking is, why can't I be my own isp with just a pair of copper wires, why do I need all the extra fees and go through someone who has a fat pipe, is there any technical reason they can't throw some switches, etc, and just let me use PPP? Is this an artifical blockade they put on it? I honestly don't know the answer to that, not familiar enough with how it is set up at the local telco or how this is arranged beyond getting an assigned IP and/or domain name and IP. Would it be technically possible to just buy an IP directly, and eliminate a couple of middleman steps? I've never worked at an ISP or anything so I don't know what steps are involved with access and hardware and software and protocols.
So what do states like mine (South Carolina) really want?
Our govenor says that promoting small business and entrepreneurs is the key while attracting big companies like BMW.
Yet, taxing VoIP is against the sentiment entirely. I know that telephony (especially on the business side) is a VERY expensive part of my overhead. I plan on switching to Vonage soon. Taxing it would make it less of an advantage vs regular phone service.
So either our goverments want it easier to for small business to succeed due to the reduction of overhead costs that the internet brings or they don't.
It goes the same for taxes in general over the internet. Not having to collect and send in sales taxes is HUGE relief of manpower!
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
The key can be found in the article...
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"It's the threat and the possibility that all of these services could migrate to the Internet," said Alexander's aide. "As services migrate to the Internet, you could bundle these services, and the telecom taxes that states currently collect they could no longer collect." -- Sen. Lamar Alexander (R-TN)
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This is simply about the states being afraid of losing a very lucrative revenue source. The thought behind it has nothing to do with with the implementation, the technical reasons for VoIP deployment, or even whether its a Bad Idea (TM) or not. Its all about maintaining tax revenue for the state.
There are legions of accoutants, lawyers, and beauracrats in every state (hell, in every level of government) looking for things that might be taxed to generate revenue. It has nothing to do with whether the tax is smart, appropriate, or germane. Its about finding sources of revenue to support state spending.