More Fallout From FCC VoIP Decision

EconomyGuy writes "While many of us have been celebrating the recent FCC decision to keep regulation off of VoIP, but there may be some undesirable results for those progressive geeks who believe government should do more than provide military defense. As VoIP takes off as a replacement for the traditional copper-wire network, local and state governments are going to lose more and more funding for important services like 911 and Universal Service."

Comments

Well, as a Libertarian...

[cfalcon]

I would argue that it's simply not the government's role to burden communications with taxes.

One argument in the article is "not taxing this is not fair, because regular phones are taxed". This is a true statement, but I would argue that the *existing* taxes are an arbitrary joke: Americans are forced to pay per minute rates on "long distance" (meaning, another state, even though the actual route to another state and the same one could end up using the exact same satellite). Why? Well, it's because the goverment *taxes* based on per minute usage. Stating that the only way to achieve equality is to apply the same flawed system equally is not good logic.

If the functionality of 911 is so important (I believe it is), then other ways can be brought about to pay for it. With the current market penetration of phones, it's not unreasonable to assume that almost everyone has access to 911, so an alternate method could be used, one that taxes everyone just as the current system does. It could even be rolled trivially into property taxes, it's can't be much because it's itemized on my monthly phone bill, and it is tiny.

Saying that the only way we'll have goverment phone services or local governments gaining relevant revenue is to allow regulation of VOIP is beyond silly. There may be a difficult time of transition, but it's clear that progress is on the side of the new technology.

But it's clear from the article what the *real* problem is:

"The City of Seattle in 2003 collected $30 million from telephone utility taxes, its fourth largest source of revenue after property, B&O, and sales taxes."

Here the argument becomes, "A technology to allow people to communicate was developed, and we allowed governments to tax it. Now that an alternative has come along, we need to allow governments to tax it or else the governments won't be getting as much of your money as they are used to."

This is the same logic that would shut down an invention that generates endless free energy (Look at that electricity tax / the private sector that exists to deliver energy!), that would shut down an invention that creates delicious food out of thin air (sales tax / destroying the livelihood of farmers), a great solution in medicine that allowed people to be free of their various prescription drug dependencies... the same idea would oppose all of these things.

Stepping out of utopia land, we can address the one thing we *can* replicate nearly for free, and realize that it is the same logic opposing free software.

It is not good logic.

boo hoo

[eclectro]

local and state governments are going to lose more and more funding for important services like 911 and Universal Service

I would agree 911 is an important phone service and should be provided.

But all the other taxes?? I don't think so.

The universl service fund was established to provide phone to rural areas. The question I have is "aren't rural areas wired already?". About internet for schools -- I say let the people who go to those schools pay for their own internet like I do. Libraries? I pay through the teeth through property taxes (Utah) already for library facilities.

So much as the federal taxes go -- the federal tax was placed on the phone to pay for the war of 1812 -- isn't that war over and paid for yet? I know it has been used to pay for all the other wars since then, maybe I don't like to see war financed through my phone use.

I know this is an oversimplification, but this represents a deep resentment of the government as it stands today, and I'm not to sure if I care if it crashes and burns. I'm sure others feel the same way -- that Washington (and many local governments) have lost touch with reality, as have the voters who keep "liars" in office on the basis of "moral" grounds.

Yes I'm mad. Phone service can go away. I'll start to use carrier pigeon if necessary.

just the facts ma'am

[Anonymous Coward]

http://www.researchedge.com/uss/dev.html

DEVELOPMENT AND INSTITUTIONALIZING OF UNIVERSAL SERVICE
Historical Context:

The term "Universal Service" was introduced in 1907 by Theodore Vail, then President of AT&T. However, in the early twentieth century it had quite a different meaning in practice. Due to basic incompatibility or a lack of interconnection, competing local phone companies could often not connect their respective customers to each other. "Dual service" or subscribing to both services with the attendant duplicate wiring and equipment was common, especially for businesses. Thus, Universal Service at first meant compatibility and interconnectivity of competing phone services that we today take for granted. It was only later that the term "Universal Service" became associated with a social compact to connect those disadvantaged by geography, income or other factors.

The Mann-Elkins Act of 1910 gave regulatory jurisdiction for interstate telecommunications to the Interstate Commerce Commission (ICC), defining telephone companies as "common carriers" who were "to provide service on request at just and reasonable rates, without unjust discrimination or undue preference." The Communications Act of 1934, though not naming "Universal Service" specifically, lays out its basic tenets "so as to make available, so far as possible, to all people of the United States a rapid, efficient, nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges." Establishing the separate Federal Communications Commission, the act gave the commission new powers to regulate tariffs and services but expressly limited federal authority to interstate service. In 1994, the sixtieth anniversary of the Communications Act of 1934, President Bill Clinton said:

When President Franklin D. Roosevelt signed this historic legislation so many years ago, few realized the dramatic changes in communications that the future would hold. Yet that stroke of the pen ushered in the beginnings of the Information Age, an era in which vast amounts of knowledge flow freely across continents and circle the globe in a matter of seconds.

Today, as we celebrate the vision of the authors of the Communications Act, we are still defining the role that telecommunications technology will play in our society. With a universe of electronic information at our fingertips, we can better educate our people, promote democracy, save lives, and create jobs across America. As we work to enhance the partnership between the public and private sectors, we continue to draw inspiration from the original Communications Act, which has long served to benefit all of our citizens and to propel our nation into the future.
(Federal Communications Law Journal, Vol. 47, No. 2, December, 1994)

There subsequently developed a series of programs, structures and protocols to encourage and enforce the expectation that basic local and long distance telephone service be available to all. The major components insuring ubiquitous availability of plain old telephone service (POTS) and other consumer services such as "free" broadcasting have been as follows:

Universal Service Fund (USF):

The Federal Communications Commission (FCC), anticipating the breakup of the Bell System, established the National Exchange Carrier Association (NECA) in 1983 as a membership association of local telephone companies. NECA is a non-profit company directly regulated by the FCC to establish and administer interstate access revenues, access charge pooling and administer the Universal Service Fund (USF) to provide assistance to telephone companies in high-cost areas (primarily rural, but defined as those with costs in excess of 115 percent of the national average). The funds are collected from major long distance carriers and administered and dispensed by NECA. The funds are used to extend telephone service to previously unserved areas, help pay for system extensions and to keep basic rates low.

D