More Fallout From FCC VoIP Decision 304
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."
Just a matter of procedure (Score:5, Insightful)
A flat tax, for example - say $0.50/month per resident. That should cover 911-expenses.
They don't collect enough tax? (Score:5, Insightful)
They can't let me have internet and VoIP without paying taxes on that too?
Couldn't 911 wire VoIP into their switchboard (Score:4, Insightful)
Wouldn't somebody with a VoIP phone servuce provider like http://www.usbphone.com.au/ [usbphone.com.au] that has a call relay station that can call land lines not be considered to be Universally covered?
After all some places are too expensive to do last mile wiring for for pots, but you can justify using wireless links to cover that area for wireless internet.
In this case, the govt might be able to achieve 911 and universal service without spending a dime, and pushing the cost back onto the consumer... which is either a bad or a good thing depending if you're blue or red... but the services will not need to disappear.
(ps... is it just me or is it odd that "red" meant "communist" last century and "freemarketeer" today?)
Cleptocracy is not progressive! (Score:5, Insightful)
Almost everybody agrees that 911 service is necessary, but it is far from obvious why this cannot be paid for by properly visible government spending, rather then trying to sneak it in like a backdoor tax on a specific service. Governments love to add little taxes here and there so as to make it opaque how much they are actually spending, leading a government with it's fingers everywhere hindering progress with useless regulation aimed only at preserving dying industries and the revenue government derives from them. Which is exactly what our "progressive" friend is saying should happen to VoIP.
As for Universal Service, give me a break. People who live in rural areas don't pay special taxes so that I can get clean air, silence, and nice natural surroundings in the middle of the city. Why the hell should they? After all I chose to live here, which it's upsides (like 8 megabit broadband to the apartment) and its downsides. The same goes for people who want to live in rural areas: they chose to live where they do, and that means taking the benefits as well as the consquences, instead of crying that others should have to pay for your luxuries.
Perhaps one day when I am older I will begin to understand how a human mind can work that calls itself progressive, and then attacks progress because it might get in the way large governments clectrocractic systems. I certainly don't now...
So levy the broadband provider instead (Score:3, Insightful)
This is just another beat-up by the telcos who are afraid of VOIP. They should get into the data carriage business, and concentrate on delivering high speed data pipes to every home instead.
It's the wire going in the door that you levy, stupid, not the protocol going over the wire! And those wires are in local neighborhoods, subject to local taxes. Just like they've always been.
Political Correctness Alert !! (Score:2, Insightful)
"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."
I cringe everytime when I read PC-speaks like the above - they just change EVERYTHING to suit their own narrow view !
For instance - they call themselves "progressive", while in reality, they are for BIG GOVERNMENT !
Please, keep your PC to yourself and don't pollute the geek scene !
Thank you.
Re:boo hoo (Score:2, Insightful)
The universl service fund was established to provide phone to rural areas. The question I have is "aren't rural areas wired already?".
The cost of maintaining and upgrading the wiring in rural areas has not been paid for already.
-- ac
"Progressive" my ass (Score:1, Insightful)
Re:Well, as a Libertarian... (Score:2, Insightful)
Something that really bugs me: cars cause pollution. Fine -- tax all cars, to remedy those whose lives are ruined by pollution. But phone service doesn't cause more 911 calls, nor directly create more poor people (who now need money, so that they can have a subsidised phone).
I'm referring my two peeves on the phone bill: 911 service and so-called "Universal Service Fund" phone service (taxes to pay for phone service for the poor).
If we want to be fair about 911 service, perhaps we should tax proportional to the benefit of 911 service -- e.g. tax the high-crime neighborhoods. Ask any cop where the 911 calls come from - he can tell you who needs to pay for the service. If you are going to call this "mean", how "nice" is it that I have to pay for calls generated by crime-ridden neighborhoods, and I have no way to mitigate things?
The Universal Service Fund (USF) -- the you have money, so you must pay for those that don't have money -- is the most un-American thing on the phone bill.
Imagine someone invents something new -- like a bicycle. "USF" bicycle service would say that if you ride a bike, you need to pay into a fund, to provide "affordable bicycle service" to those too poor to get a bike.
But it is arbitrary too -- you can duck the wealth-redistribution by getting a skateboard (where there is no USF, which applies to bikes only).
If you're too poor to afford a phone, just open your window and yell. Write a letter. Do whatever you did before the device existed. Keep your hand out of my pocket.
Fees. (Score:3, Insightful)
911 is state of locally funded. The cell phone 911 problem is mainly a result of people not knowing where thay are. Net thing you know, there will be a lobby group to requre funding for 911 cell phones for dogs and cats. Hell, they can't tell us where they are either but there is some remote possibility that you might wreck your car or fall off a mountain and your dog or cat could push the panic button for you.
There needs to be some sort of cost benefit analysis applied to this stuff. IMO, it's WRONG to 'tax' (fee) everyone in order to deal with people who are too stupid to know where they are. As for those situation where you may be able to push the panic button but not talk, there are commercial services available for those who desire this much coddling.
VOIP over 2.5G or 3G phones will not steal monies from this 'tax' structure. The fee is a pass through from your phone company. They will still have to pay it and they will, generally, continue to pass it through. Interestingly, the only phone company owner I know says that there is no real accounting of these fees, even though the companies are required to pass through no more than they charge.
I know that universaL access is charged on my IDSL line so no loss there if I go VOIP. Is it also charged to cable TV companies? If so, then VOIP is a red herring for more 'tax'.
Re:They don't collect enough tax? (Score:1, Insightful)
Wrong. The State Department should be kept. Diplomacy will be the new defense. We will be *offenseless*, in other words without a military. Defense does not equal imperialism.
Re:Well, as a Libertarian... (Score:1, Insightful)
>
> Keep your hand out of my pocket.
It's the US govt. who (lawfully) puts their hand in your pocket for things like this. The very definition of a country means that some people end up "footing the bill" for others less fortunate than them.
Get used to it. If you don't want to keep your end of this bargain, renounce your citizenship.
why should phone service pay for it anyway? (Score:5, Insightful)
The likely reason these are surcharges on your telephone bill is because Congress was trying to hide taxes in "user fees" again, knowing full well that most people would end up paying for these anyway, not only as part of their own phone bill (which they could perhaps avoid) but also in higher prices for goods and services.
If these are federally mandated services, then the federal government should pay for it out of federal taxes. If they have to be raised in order to do that, that's OK: you were paying the taxes anyway already, and at least making it part of the regular tax system means that (1) you see who is responsible for the expense (the federal government), (2) a separate bureaucracy for administering those taxes can get eliminated, and (3) phone companies have a harder time hiding phoney "federal" charges among real ones on their bills when such charges don't exist anymore.
nope just tax Cell/mobile users or local gov does (Score:3, Insightful)
plus who
the local fire service gets its funding from where ? should they not fund the 911 call center ?
Your information isn't. (Score:3, Insightful)
But you could learn a thing or two about economics. See no one wants to pay for infrastructure, but an infrastructure that's cheap for everyone to use generates a lot more commerce which inevitably enriches everyone. People like you, who don't advocate a cheap infrastructure, are really anti-trade, and pro Scrooge McDuck. And when the pendulem swings back, it always does, the consequences might make the reformations of Teddy and Freddy Rossevelt seem tame.
Re:Tax Cuts are going the wrong way .... (Score:4, Insightful)
>Education, Healthcare, Emergency services
Saving $40 a month is almost $500 a year which goes a long way towards paying off hefty healthcare bills and credit cards to make up for our lack of services.
Re:Cleptocracy is not progressive! (Score:5, Insightful)
The 911 service tax is VERY visible on my telephone bill. In fact, it's a line item. It's much more visible than the amount of money taxes I spend on nuclear submarine building, for example.
It seems reasonable to fund 911 services per phone number. It seems more fair and visible than taxing everyone's wage income by another $3 per year. I think this kind of use fee is fair and reasonable and should be encouraged because it does bring visibility to real expenses.
Now, on the flip side, the bogus "regulatory fees" line item that the phone companies make up based on mostly on their marketing expenditures, now THEY are a problem!
Re:911 sucks (Score:3, Insightful)
Yes, it could. In this country you can normally defend yourself by force. Imagine the situation in places like England where the population has been disarmed; they are defenseless against this kind of scum.
-ccm
What Would You Do With a Billion Per Month? (Score:2, Insightful)
There's ~370 million people in US. Let's assume there are only 100 million phone lines. You pay almost 10$/month in bullshit taxes and fees for every phone line. That's like a billion per month.
This is allegedly for things like 'universal access'. WTF? For 12 billion per year for the past decade, we should all have fiber to the door with GB internet access.
Instead, we have a bunch of fat, rich telecom execs and public service government parasites doing something, 'something'? with all that money.
So if anyone is looking for a tear over any 'lost' tax revenue, you won't find any from me. May all of the money sucking government parasites dry up and die, so we all have a little more blood to live on.
Re:boo hoo (Score:3, Insightful)
You have a phone line, don't you? The honest truth is that it is an unjustified subsidy for telephone companies. I think that when the fund was first established, it may have been justified (if there was oversight, which there isn't). But hasn't technology advanced to the point where the cost is dramatically lower than when the fund was first established in 1983?
In the olden days when there was an operator behind the switchboard this may have been an issue. But now everything is computerized, especially the switching centers. And if there is a line break in your town some lowly tech in Atlanta (or whever your baby bell is headquartered, maybe even India now) can tell within feet where the line break is. And when you call the operator for assistance, do you really think that the operator is down the street?
I'm really sure the companies really love this bit of pork thrown to them, and have a whole line of lobbyists to whine to congress to change nothing.
If the Universal Service Fund were killed you would still have phone service (and at the same cost). Don't be fooled by greedy companies shouting about the sky falling.
Re:BULLSHIT bullshit bullshit (Score:2, Insightful)
Please point out where in the United States of America's Constitution that I am bound by contract to help those "less fortunate" than me, since we are talking in a discussion about a US Federal government. If you look at the document, it is basically an agreement amoung State Republics to establish free trade, a common currency, a postal system, and how to interact with other nations.
With regard to the main discussion: A point that does not seem to be brought up is the fact the FCC gave itself and only itself the power to regulate VoIP. This power to regulate was not given by an act of Congress, but by a decision the FCC itself made.
It's unfortunate, IMHO, that we are commenting and debating over the outcome of such rulings. The questions that need to be asked, debated, and answered are:
I would say no.
Re:911 sucks (Score:5, Insightful)
No, I don't think that's worse than the guy who got shot. Sorry.
Re:Just a matter of procedure (Score:2, Insightful)
Great, another regressive tax to pay for an essential service. Just make 911 service a manditory expenditure at a rate equal to $0.50/month/resident and pay for it out of the general fund. At least that way there is a chance it can be funded progressively.
Re:911 sucks (Score:3, Insightful)
Re:Tax Cuts are going the wrong way .... (Score:5, Insightful)
There was a small town in Arizona or New Mexico somewhere that privitized thier police force. They actually lowered thier crime rate. If I remember correctly, the town hired a company to do the police work and paid bonuses for lowered crime stats. This made the police do crime prevention measures, instead of just post crime clean up. I wish I could remember the name of the town.
Regressive Taxes (Score:5, Insightful)
I see no reason why 911 and other services cannot be supported by a tiny portion of an income or wealth tax. Alternatively, part of an airplane tax+tariff (a CO2 tax or a airplace fuel tax+tariff) could be used to pay for it.
Re:Killing Muslims does indeed make the world safe (Score:3, Insightful)
Well, they must be different from Arizona cowboys, then, because I grew up with cowboys out in the sticks who would fight you as soon as look at you.
The authentic ones are humble blue-collar laborers who care about the earth, animals, and people.
Right, they care about animals so much they brand them with red-hot irons and cut off their nuts without anesthesia. Not to mention rodeo.
Have your Lucchese crocodile-skin boots ever set foot on a working ranch, cowboy?
Folks who are receptive to progressive causes I might add.
Oh, of course. All the "cowboys" down on Sixth Street in Austin, you mean. The ones I know, the ones who have actually had cow shit on their boots, heartily detest all things Democratic and progressive.
-ccm
Re:Tax Cuts are going the wrong way .... (Score:2, Insightful)
We've had it in some parts of the U.S. It's called "civil forfeiture" [ij.org], where the government takes your stuff on the theory that your stuff (not you, who are in theory entitled to a trail, but your stuff, which isn't) has commited a crime. In some places the cops get to keep the money and property confiscated.
"Ok, guys, today we can go after that street gang knocking over liquor stores...or we can go after the guy growing pot in his basement. And we'll get to take his money and his house to help fund the department...and your salaries. Whom shall we go after?"
This madness is fortunately being reigned in a little bit now.
(The irony, of course, is that libertarian capitalists fight this strongly as an infringement of not just civil liberties but "property rights", while it really is largely a result of the tax cuts and capitalist thinking that said libertarian capitalists so admire.)
911 (Score:3, Insightful)
All US local, state, and federal and I would assume foreign governements cry foul when their distributed tax schemes get consolidated. See we only charge you 1% here, and here, and here, and here, and here, and here, and here, and here....sure it adds up to 67% but this tax is only 1% see.
Now as far as universal service, several cities are trying to do that. Which would provide the poor with near free wireless ISP, cell, and phone service. Of course they are being sued left and right for it.
Not (Score:3, Insightful)
Bzzzt. It wasnt lack of regulation that led to the AT&T breakup - it was lack of competition, eg AT&T was a monopoly, becuase land-based copper is inherently a geographic monopoly, and AT&T just bought up all the small companies. And once a given area was wired, the barriers to entry were just too high (eg, no one could afford to build out their own copper plant) *And*, the breakup did nothing about that geographic monopoly (at least as far as local service was concernerd).. It *did* eventually lead to the current state of long distance, where there is tons of competition (You hear ads for a new 10-10xxx company every few months), rates are low, and consumers are king.
There is *already* healthy competition in the VOIP industry, and even if larger players buy smaller ones, there is no inherent geographic monopoly to serve as a barrier to entry for new entrants.
Concerned parties should be more worried about the current state of broadband access, where current telco's and goliath cableco's are forming up a duopoly - one choice for cable, one choice for DSL, and wireless tech has lots of hurdles to clear (literally, getting LOS in a hilly area for more than 100ft is almost impossible)
Tax Cuts are going the wrong way ....Pound Foolish (Score:1, Insightful)
Plus for most people broadband averages $30-50 then add your VoIP ($20), then that cell phone ($40-50) and you're really not saving as much as you think.(1) If you're doing that much volume? Then get an 800 number.
(1) Oh yeah, this is were everyone interjects that second phone line argument. Got a hint for you all. You don't need it, especially with V.92.
I also want to interject the fact that while the economy is doing better. It is still soft, so cell phone plus VoIP plus broadband really isn't a wise investment at this time. Put all that money in mutual funds and you'll come out much farther ahead than all your peers trying to shrug off there "consumer lifestyle" bills.
Re:Universal Service deserves to die (Score:3, Insightful)
I think a better way is to use the connection to the power company as a "battery". Use whatever power generation methods you have to generate power when conditions are good (high sun or wind), and sell your excess back to the power company. For solar, this is probably during their peak power times, when rates are highest. Then, when your local generators aren't doing so well (nighttime), you can buy power back from the company, at a reduced off-peak rate. You'll probably come out ahead, and won't have to install costly power storage systems.
Progressive or oppressive? (Score:4, Insightful)
More and more I am objecting to phrases like "progressive geeks who believe government should do more than provide military defense". Some of us believe more government than the minimum is oppressive and that greatly reducing the size of the government would be progressive (i.e., "progress").
Re:So simple people miss it. (Score:3, Insightful)
> Blood money is a lousy way to pay for anything.
> If this is a a cause you think is "worthy", just make an extra
> payment into a "needy get the service free" fund.
Whether one emotionally doesn't believe in taxes and price regulation for essential services is irrelevant; it makes sense from an economic perspective, as well as from a social contract perspective.
As macroeconomics theory states, it makes sense to look towards a tax in several cases, one of which is when the marginal costs (MC; the incremental cost to add a single additional consumer to an existing service) is much less than the average cost (AC; the total cost for the service divided by the total number of users). In other words, the fixed costs for a particular service is very high compared to the marginal costs.
So let's say the fixed costs for providing the 911 service is $1000 (costs for infrastructure, monitoring, etc). Let's say that the marginal cost for providing the 911 service to a given subscriber is $10.
Assume that we have 10 rich people who are willing to pay $200 for the service. We have 90 poor people who are willing to pay $11 for the service.
We want to supply all 100 people with the service, so to do that, we have to charge a max of $11 for the service. The marginal price is $11, and the marginal cost is $10, so we're okay from an efficient price perspective.
The problem is that at this price, we're losing money: ($11 x 100) - ($1000 + $10 x 100) = -$900. So it makes sense to allow the 911 service to have a monopoly, but use regulation to set the price at a level that has MR > MC, but subsidize the fixed costs with taxes.
For this example, let say there's a $91 tax that only the rich people pay, and a $1 tax that the poor people pay. Pretend that the tax rate is progressive enough to cover this with the difference in income. So in taxes, we collect ($91 x 10) + ($1 x 100) = $1000. Okay, the fixed costs are covered. Now we charge $10 for each user that uses the service. For 100 users, we generate (100 x 10) = $1000 in revenue, which covers all of our costs. The 911 service is exactly breaking even.
Moreover, each group is paying equal to or less what they were willing to pay. The poor people are paying $10 for the service + $1 in "911 tax" = $11. The rich people are paying $10 for the service and $91 tax = $101 for the service, which is less than the $200 they were willing to pay for the service.
Is this more efficient? Macroeconomics theory says yes. If the rich people had been the only ones served, they would have have had to pay [$1000 + ($10 x 10 users)] / 10 users = $110 for the service to just break even. This price would be even higher if a private company had been running the service, since they would have to do more than break even; they'd have to turn a reasonable profit. So from the rich people's perspective, the regulated, taxed price of $101 is less than the case where they were the only ones served ($110) as well as being lower than the maximum price they're willing to pay ($200).
So in conclusion, in the regulated case, everyone gets service (social contract and altruism benefit), both the rich and poor people pay equal to or less than what they were willing to pay (maximize the served base), the marginal price is higher than the marginal cost (efficient price), and the 911 service is break even (so we're not charging too much). Everybody wins.
This example is a little simplified because the marginal costs are too close to the fixed costs (1% for this example). The fact is the marginal costs for providing 911 service is nearly $0, but the fixed costs are very high.
Of course, unnecessary taxes are outrageous, particularly when spent on pork spending bills. Yes, Dubya, I'm looking at you and your damn yacht [reuters.com].
Re:Well, as a Libertarian... (Score:3, Insightful)
I, for one, view it as a responcibility to care for those less fortunate than me, to try to raise them up to my level, so they can do the same to other unfortunates.
Unless the couple cents that 911 services cost you monthly are seriously hurting your financial position in life, then you have no right to complain.
To be confrontational, I don't drive a car, so therefore I should get my road building and maintence tax back, after all I ride a decent mountain bike. I'm also out of primary and secondary school, therefore I should receive back my portion of property taxes, even if it will make us a more violent and thuggish country in the future. My house is not burning down, therefore I should not pay taxes that go to emergancy services.
This is one reason why I miss religion being common place, is that it breed a sence of common good, and compassion. These are two things we utterly lack now, in America (and it is spreading throughout the West.) All we seem to care about is ourselves aquiring as much money (gadgets!!!) as humanly possible, screw everyone else. This is repugnant. If you do not care about others in you community, then you have no right being a member of it, or receiving any services from it.
Unenlightened self-interest is getting quite old, and judging from the state of the world, it does not work. Any system should be based an minimizing suffering of the whole of the community, and not enhancing the privlege of any individual or group. To try to include some Randian trite into this, is just to put up a smoke screen, hiding nothing but a shallow and petty rational allowing one to be an egotistical bastard, and a drain on the rest of us.
Sorry for ranting, this was not meant to develop into something flame-like. It's just a hot button on me lately.
Just Pick Other Revenue! (Score:3, Insightful)
Society has deemed it important to have emergency response centers and 911 service (and I agree) and thus we need to tax people in order to pay for these services. The notion that this tax must be paid by telephone users is based on several misconceptions.
First we have the misconception that somehow the people who use the service should pay for the service. In many circumstances in private industry this is valid but there is no reason to believe this is true for emergency centers. If we really wanted to adopt this system we could simply charge people when the emergency services arrive after a 911 call. I think the fact most people would find this troublesome, as it discourages those without much money from using emergency services, shows that in this case we really DON'T believe emergency services should necesserily be payed for by those who use them. Rather it is a general societal good and should be paid for through general societal coffers (income tax, property tax).
Secondly, this rests on the misconception that a phone tax somehow charges the people using the resources appropriately. However, it is quite unlikely that those who have 2 phones are twice as likely to use 911 nor are those who make more calls more likely to use 911.
In short this issue is a chimera. 911 and other services can be paid for just as fairly using other revenue sources. The reasons to put it on the phone services in the first place was just to hide the tax from the public, they know about it now and we might as well fess up.
Re:Wrong economics model (Score:3, Insightful)
> different qualities based on
You're describing tiered services using a price discrimination model. That works for some situations, such as for movie theaters (you spend more to see a movie during prime time than during a matinee). However, it won't work if you don't have an objective basis for the price discrimination. How do you determine the basis for price discrimination for a service? It's not like you can ask the person what their income is and charge them based on that.
So you'd be left with providing "tiered services": you pay a little for "economy service" and more for higher levels of service. The problem with that how it would even be possible to provide tiered services? It's not like emergency services are like cable television where you can have premium services (that have a low variable cost, but you can charge a lot for). Would the "economy version" only respond to every other call? Maybe they'd send someone out within 24 hours instead of immediately? No, I can't think of a way to make tiered services work for 911 services. And certainly not in a way that would be more optimal for the example I described.
A second concern is with the problem as I outlined it [slashdot.org] is that the fixed costs are much larger than the marginal costs. Therefore cost savings do not come from reduction in the marginal costs; they come from per unit reductions in the fixed costs; i.e., spreading the fixed costs across more users.
The solution I provided required a roughly equal tax with no need for price discrimination. Assume the poor person has income of around $11,400, and the rich person has income of $1,000,000 (obviously an extreme example, but unfortunately not unheard of in the U.S. today). That makes the $1 "911 tax" on the poor person of to be around 0.008% of their income. On the rich person the $91 "911 tax" would be of around 0.009% on their income.
You tax based on income, then you charge $10 for the service. So no price discrimination is necessary.
> Moreover, if the poor truly couldn't pay for even the lowest-
> priced service, the government could supply "911 vouchers"
How would you pay for that? It's easy to throw out a "solution" that fits a particular ideology, but working the numbers is when the rubber meets the road.
I described a revenue neutral 911 program that actually minimizes the price for 911 services for both rich and poor people (for my example). So for you to propose "vouchers", how would you make sure those 90 poor people were served without making the rich people pay more than $101 (or $110 for that matter) given the constraints of the problem? I don't think you can.
> There's absolutely no reason that the government needs to
> supply a monopoly service.
That sounds less like reasoning, and more like dogma. As my admittedly simple example illustrated, it's clear that any case where the average cost is significantly larger than the marginal cost is a candidate for regulation. To say otherwise is to rely less on rational thought and more on ideology.