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The Internet Government Privacy The Almighty Buck Politics

Possible Taxes For Broadband Users 262

Morganis101 writes "CNET News reports that some broadband users might have to endure new universal service taxes. From the article: 'The suggestions came as lawmakers started debating changes to the Telecommunications Act of 1996, which created the framework for the Universal Service Fund. The USF should continue to be industry funded, but the base of contributors should be expanded to all providers of two-way communications, regardless of technology used, to ensure competitive neutrality, a bipartisan coalition of rural legislators said in a June 28 letter to the U.S. House of Representatives Energy and Commerce Committee, which will be drafting the rewrites. That means companies providing broadband services such as VoIP over telephone wires would also have to pay into the fund.'"
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Possible Taxes For Broadband Users

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  • I for one... (Score:3, Insightful)

    by tekiegreg ( 674773 ) * <tekieg1-slashdot@yahoo.com> on Friday July 01, 2005 @05:57PM (#12965744) Homepage Journal
    Would welcome this with some skepticism and hope that the revenues from such a tax might go to benefit the online community (less Spam, Phishers, Identity thieves, etc). Then I remember, U.S. government, War in Iraq....*sigh* pardon me for being so naive...
    • Towards the government I feel no scruples and would dodge paying the broadband tax if I could. Yet I would give my life for the Internet readily enough, if I thought it necessary. No one is patriotic about taxes.

      --George Orwell's Wartime Diary, 1940

    • Re:I for one... (Score:4, Insightful)

      by ConceptJunkie ( 24823 ) on Friday July 01, 2005 @06:27PM (#12965953) Homepage Journal
      The funny thing is that war in Iraq is peanuts compared to all the other pork barrel stuff we the people subsidize.

      $200 billion is some real money, but compared to trillions a year, it's chump change.

    • Re:I for one... (Score:4, Insightful)

      by walt-sjc ( 145127 ) on Friday July 01, 2005 @07:33PM (#12966318)
      Um, 40% of the USF is marked for the E-Rate program which is littered with mismangement and fraud. The LAST thing they need is more money.
      CNet [com.com] had an article a while back about it.
      • Here [com.com] is a better article about the USF problem... Google finds all... Time to fire up that letter writing campaign asking that the USF program be killed and not expanded.
      • Exactly. The E-Rate program is rife with waste; and the "rural" people that are campaigning for it get a rediculously small part of the pie; most of the money goes to lining the pockets of billion-dollar district connectori, and filling rooms full of Cisco equipment that will never be used. The application procedure is a rediculous, multi-day joke, and an entire industry has grown up around consultants that will sort out the paper for a fee. The time to kill the program is NOW....replace it with a block
    • Re:I for one... (Score:3, Interesting)

      by serutan ( 259622 )
      The money is suppoed to go into the Universal Service Fund, which (if you read the article you'd know) is used to help provide services to low income people, non-profits and so on. So it sort of does benefit the online community by including more people in it.

      However, I wish that if they want to do that sort of thing they would do it by increasing existing taxes and taking the money out of there, rather than creating a new tax mechanism with all its accompanying overhead, which eats into the money collecte
  • by Anonymous Coward on Friday July 01, 2005 @05:57PM (#12965750)
    the state wants more money.

    I never could have anticipated this.

  • Future speak (Score:2, Insightful)

    by Hachey ( 809077 )
    Anyone else notice all the 'future speak' in the article? Should, might, will, suggest? Politicians are fluent in the conditional tounge. I wouldn't worry about it.

    Check out the Uncyclopedia.org [uncyclopedia.org] :
    The only wiki source for politically incorrect non-information about things like Kitten Huffing [uncyclopedia.org] and Pong! the Movie [uncyclopedia.org] !
    • Re:Future speak (Score:5, Interesting)

      by ConceptJunkie ( 24823 ) on Friday July 01, 2005 @06:20PM (#12965898) Homepage Journal
      Yeah, but here's the context:

      We will need more taxes revenues to finance our spending like a drunken sailor. We should give you a justification for it, seeing as how we waste so much money, billions literally fall through the cracks. But we might be able to slip it in a way that you won't notice, like so many other taxes you pay... indirectly. If not and you complain, we will suggest that you are unpatriotic.

    • It reminds me of the email tax scare in the late-90s and early-00s.
  • by Doc Ruby ( 173196 ) on Friday July 01, 2005 @06:00PM (#12965764) Homepage Journal
    Why should the richest people in America pay taxes [nytimes.com], when they can just hire "personal Websters" to surf the Net for them, and pay their taxes out of their minimum wages [dol.gov]? Or just save that extra markup by outsourcing the Internet work to India? All the government does is stop rich people from making money. Why should they pay for it, when they can pay much less in campaign bribes^Wcontributions, to keep the little people in line, at their own expense?
    • " Why should the richest people in America pay taxes [nytimes.com], when they can just hire "personal Websters" to surf the Net for them, and pay their taxes out of their minimum wages [dol.gov]? Or just save that extra markup by outsourcing the Internet work to India? All the government does is stop rich people from making money. Why should they pay for it, when they can pay much less in campaign bribes^Wcontributions, to keep the little people in line, at their own expense?"

      Your sarcaastic commnent is bs
      • by Doc Ruby ( 173196 ) on Friday July 01, 2005 @10:22PM (#12967017) Homepage Journal
        Your tax breakdown is BS. Maybe you didn't read the link I posted, but the number of rich people who pay no taxes just increased to 115% in the past year alone. How do you explain that? Their productivity?

        Or some pedantic distinction between revenue and profit? What's your point? Corporations don't pay taxes on income, they pay it on profit. And anyone who's paying 90% of their income to make it is the kind of fool who makes $1M a year only by theft - and they don't pay taxes. Like those people paying no taxes, or the 50% of corporations which have paid no taxes since 1998. Where are you getting this "generating wealth honestly" BS?

        To be more precise about your BS talking point justifying the free ride you want out of the tax system: The top 50% had 86.2% of the income [politicalforum.com]. Sure, they paid 96% of the taxes, on "only" 86% of the income. But the bottom 50% had and income under $29K. Consider the overhead we all must pay for food, shelter, energy, clothing, which comes out of that first $29K. After that, it's all Mercedes, beach houses, caviar... or rice & beans. Even if $20K is overhead, that remaining $9K ($600:month) at the bottom is being taxed at about the same rate as the remaining several million at the top. Especially when we're talking about the very top: the top 1% have about 125% the income of the bottom 50%.

        FWIW, I'll see your irrelevant "Wes Clark", and raise you the relevant Grover Norquist. Who hates taxes, but not as much as the government itself, the "beast" he hopes to "starve", "until it's small enough to drown in the bathtub". You're going to love that, when there's no government to tax you, but also nothing stopping corporations from ripping every cent out of your hide.
  • by __aaclcg7560 ( 824291 ) on Friday July 01, 2005 @06:02PM (#12965779)
    We already got a telephone tax [house.gov] to fund the Spanish-American War (1898). I wouldn't be surprised if we have a broadband tax to fund the Iraqi-American War, too.
    • we will pay no taxes for the internet. we are paying for our bandwidth. the blind-pig idiots in government can just tax the rich instead of letting them off.

      what we WILL do is hack the tax collector if they try :-D

      watch and learn, grasshopper.....
  • Logic? (Score:3, Insightful)

    by BlackMesaLabs ( 893043 ) on Friday July 01, 2005 @06:02PM (#12965781)
    At what point does the government need money from me because I'm on a privately run network? The internet is not owned or operated or maintained by any nation, so I don't see why we should pay taxes. (exceptions of course being things like govt. websites, but they are a different case)
    • Re:Logic? (Score:5, Funny)

      by ConceptJunkie ( 24823 ) on Friday July 01, 2005 @06:14PM (#12965851) Homepage Journal
      The logic is:

      They are the government. You have money. They want it.

      Everything else is just rationalization.

      • And we live in a plutocracy [reference.com]. Although those whose income is in the top 5% pay 50% of the income tax (collectively), the remainder still pay a higher percentage of their income to make up the remainder.

        There are two other things to remember:

        The Golden Rule: He|She who has the gold makes the rules.

        Life is like a sh%t sandwich. The more bread you have, the less sh%t you have to eat.
        • "And we live in a plutocracy [reference.com]. Although those whose income is in the top 5% pay 50% of the income tax (collectively), the remainder still pay a higher percentage of their income to make up the remainder.

          There are two other things to remember:

          The Golden Rule: He|She who has the gold makes the rules."

          No, the people in the top tax bracket pay the greatest percentage of their income. The rule you're looking for is "democracy - 2 wolves and a lamb deciding what's for dinner.". The wealthy are
  • Now (Score:2, Funny)

    by Chooche ( 214143 )
    I have to dl even more stuff just to get my $100 worth of cable fees!
  • They're called astronomical fees that I give to my cable company.
  • Money Wheel (Score:3, Interesting)

    by Doc Ruby ( 173196 ) on Friday July 01, 2005 @06:04PM (#12965795) Homepage Journal
    Now that cable broadband is officially an info service, not a telecom service, its providers don't have to pay taxes. So of course its users have to pay taxes, or Congress won't be able to pass itself pay raises [boston.com]. The money's gotta come from somewhere - and it ain't comin' from campaign bribes^Wcontributions. That money is mostly spent on ads, run by cable companies.
  • Interesting timing (Score:2, Insightful)

    by mehtajr ( 718558 )
    It's interesting timing that just this week the Supreme Court ruled for the FCC when they ruled that cable modems are not "telecommunications services, " but rather "information services." Might that exempt them from any proposed taxes?
  • I cant get over that telcos are happy to pass them onto their consumers. That'd be like McDonalds adding 11c to your bigmac to pay for trash collection.

    It leads to very deceptive advertising which can't be good for the consumer. Comcast and T-Mobile need to pay those taxes themselves and put sticker prices up to compensate.

    While we are at it, this sort of thing is likely to push VoIP offshore. I rarely receive calls on VoIP so it wouldn't make much difference to me if it terminated in canada or mexico.

    • I cant get over that telcos are happy to pass them onto their consumers. That'd be like McDonalds adding 11c to your bigmac to pay for trash collection.

      No, not really. This is a tax that is per person or per broadband user. It makes sense to pass it on, just like sales tax. If anything, the companies *should* pass this on to consumers so that the consumers can know what they're paying for. If the consumers are pissed about high prices for broadband, they should know why.
      • I'm in full favor of companies itemizing this on a bill, but it should be included in the advertised price.

        Telcos advertise artificially low prices, and then tack on the fees ON TOP.

        What's to stop Comcast advertising broadband for $10/month, and adding a $20 line fee and a $15 bandwidth usage assessment to each bill. Things are going to move in that direction unless regulation dictates that people have to advertise the true cost of the service.

    • I cant get over that telcos are happy to pass them onto their consumers. That'd be like McDonalds adding 11c to your bigmac to pay for trash collection.

      You think they don't? The only difference between your phone/internet bill is that they let you know exactly how much the taxes are costing you. Like you said, taxes are a cost of doing business. Like any other cost of business you need to balance your prices to take them into account. If McDonalds suddenly had to start paying a 50 cent "junk food tax"

      • I wouldn't mind if t-mobile advertised $50/mo service and the bill comes and it reads:

        Service $47
        Regulatory fees $2
        Extra soft toilet paper for CEO fee $1

        But instead they advertise $47 which doesn't seem right.

        I had a similar conversation with a comcast rep that called me. Their service is very slightly cheaper (at face value) than my current ISP, but my ISP charge me the EXACT amount that they advertise, when i know that my comcast bill is bound to be higher.

        Including taxes in the price won't actually i
        • But instead they advertise $47 which doesn't seem right.

          It doesn't? When does the advertised price ever include tax? Have you ever walked into a store and paid exactly what the price tag said? While some things like clothes and food aren't taxed in many jurisidctions, in most cases you're paying a sales and/or service tax to at least one jurisdiction (and sometimes two or three are taking a cut) every time you step up to a cash register. The company is only charging you X dollars. The government happ

          • When does the advertised price ever include tax?

            I think every gas station i've seen here includes tax in their gas prices. Otherwise how would people avoid putting more gas in their car than they have cash in their pocket. It's not easy for the gas station to take their product back if the customer cant afford the taxes.

            I grew up in the UK where all retail sales are already priced with VAT included. Some stores show you both prices - particularly online or in places like costco.

            Most receipts now show yo

    • Just stop using common utilities as a way to extract more money from taxpayers. Half my phone bill is taxes. A good portion of my power bill is taxes and other "fees". Now it looks like they're preparing to turn broadband into the same steaming pile of crap.
      • Speaking of which, expect to spend more for sewer and water taxes in the future. Any utility that has a 'pipe' to you is a perfect mechanism for governments to extract money from you.

        • Every month i'm billed for X gallons of water - which is fair enough.

          But i'm billed the same X number of gallons of sewerage, yet at least half my water gets sprinkled on my lawn and evaporates off instead of ending up in the city sewers.
          • That's because it's a whole lot easier to measure clean water than sewage. I mean, would you want to service a consumer house level meter for that stuff?

            It's easier and cheaper to just base it off of your clean water usage.
  • Here's my Qwest DSL bill (I'm cell-only and pay plenty of taxes there too):

    Qwest Choice DSL Standalone: $33.00
    Federal Universal Serv. Fund Private Line at 11.1%: $3.66

  • Competitive neutrality? So they want to eliminate competition? Is it just me, or does this country move farther towards socialism every day?
  • by Anonymous Coward
    How can something the government does not provide, aid, or own be taxed? If these taxes go towards better service, faster connections or hell, even free broadband for underpriveledged areas then I see no problem. If this tax goes towards anything other than the service that is BEING taxed then maybe its time for a tea party.
  • What do we, the citizens get from this tax? Any nice services (I really wouldn't mind getting broadband offered in my area[read south south Georgia]), special protections (such as universal data storage), new projects/R&D would all be nice and reasonable outcomes for this tax.

    However I live in America, rural America to be precise. The only thing I expect to see is a few dollars less and another thing to bitch about.
  • My question is, what sort of neutrality are we seeking here? "All providers of two-way communications." I fail to see how your internet service and your phone service are sufficiently similar. Maybe they should charge Motorola that tax for selling FRS radios. (sarcasm intended)
  • by soft_guy ( 534437 ) on Friday July 01, 2005 @06:22PM (#12965907)
    ...that I'm using my neighbors WiFi network.

    Network name: Linksys
    No wep key...

    Woo hoo! No cable fees for soft_guy!
  • by SkiifGeek ( 702936 ) <info@@@beskerming...com> on Friday July 01, 2005 @06:23PM (#12965916) Homepage Journal

    Surely if they ever were going to introduce taxes, they could introduce a proportional tax, linked to the network connection speed, and apply it across the board. Someone on a 14.4 connection might get a fraction of a cent tax on their connection, while someone on more bandwidth than they know what to do with will be taxed accordingly.

    If it was possible to ensure that these taxes would be reinvested back into improving infrastructure and subsidising broadband rollout it could be palatable for American users. Essentially the early adopters / massive bandwidth capacity users subsidise the efforts to bring more users up to their standard of connectivity.

  • by J'raxis ( 248192 )
    "Bipartisan," I love that term. It basically means that tweedle-dee and tweedle-dum decided to conspire together on some new scheme so you have no way of opposing it.
    • "Bipartisan," I love that term. It basically means that tweedle-dee and tweedle-dum decided to conspire together on some new scheme so you have no way of opposing it.

      Or as someone around here said a while back, the Republicans are the party of Evil and the Democrats are the party of Stupidity and when they co-operate it's to do something Evil and Stupid.

  • In exchange, let's get universal broadband service via competitive ISPs and metropolitan WiFi utilities.

    I mean, thats the point of the bill, universal service :-)
  • Why not just tax us 100% and redistribute it all..

    So we can finally have the 2nd revolution and get this over with. Its long overdue.
  • by silentbozo ( 542534 ) on Friday July 01, 2005 @06:30PM (#12965966) Journal
    Just goes to show you that when our "elected representatives" look at us, the electorate, all they see are pockets to be picked. Whose idea was it to concentrate all that power in the hands of the very few, anyways?

    I already pay 7.65% for FICA (ie, Social Security), but were I to run my own business and turn a profit, I would have to pay double that, since I would be both employee and employer. Of the money I get after FICA, state and federal income taxes, and state mandated unemployment insurance, I then get charged 8.25% in sales taxes, surcharges and strange fees for my electric, water, gas, and telephone bills (including that 3% tax left over from the Spanish American war, which was well over a century ago), and twice a year, I have to fork over money to the local county for the privilege of owning tangible property.

    And for this I get: roads that still need fixing, bribery and corruption scandals that cost taxpayers money, ever-increasingly complex laws that require you to have a law degree just for self-defense, school districts that wail and complain that they need bond money, but then turn around and spend the money building shopping plazas on top of abandoned oil fields, leading to the project being declared unusable, and of course, the innumerable tax breaks and pork-barrel projects doled out by our collective congresscritters to keep their districts happy at the expense of the rest of the United States.

    It's a pity that elections couldn't take place in late April, say a week after tax day. Oh well, I might as well start working on my taxes for NEXT year...
  • by stuartkahler ( 569400 ) on Friday July 01, 2005 @06:30PM (#12965969)
    (sub)Urban America deserves subsidies from the rural folks to help offset the astronomical prices of land that we pay. Land in rural areas is as cheap as $2000/ acre vs $100000+ / acre in the suburbs alone. They can pay me my my share out of the USF until that runs out next week. We can work out a deal for the rest; maybe start with some loose country girls.
  • Seriously what does it fund?

    There should be not tax on this shit. If our government wants to tax everything secretly, lets just send back our lame Bush tax cut.

    • Some examples of what this tax has funded: It Puerto Rico, it was supposed to be used to wire 1,500 of Puerto Rico's schools for the Internet. In 2001, only nine schools had been wired. Auditors also found nearly $23 million in equipment that had never been installed in [Puerto Rican] schools, along with $3 million per month spent on high-speed Internet connections in schools that didn't even have PCs. In Chicago, about $8 million worth of equipment provided by SBC was never deployed in the city's public
  • In most countries where I have talked about this subject, providers of services tell you how much the service is going to cost you. Sometimes it's tricky to work out the details but generally it's all there in the contract. In the US companies refuse to declare prices inclusive of tax. It's also hard to guess what taxes you're going to pay. (Do you know what all the taxes on your phone/DSL/mobile bill are?) So - if the government wants to levy a tax on broadband, I don't mind too much, it'll probably only b
  • One reason that a tax can be imposed on VoIP users is because there is a central entity that is being paid to provide a service. If we can get rid of that entity, we get rid of the tax (at least for the voice component). Unfortunately, as long as there are people using switched telephone only for voice, if you want to talk to those people, you have to go through some means to get out to that switched network. But for the ever increase numbers of people able to use voice over the internet, direct peer to

  • by spisska ( 796395 ) on Friday July 01, 2005 @07:06PM (#12966184)

    I'm not one to bitch about the editing here, but this title really ought to have read: Possible Taxes for US Broadband Users.

    That having been said, the purpose of the USF was (is) to ensure that telecom companies extend coverage to sparsely populated areas rather than just staying in cities where they get far more uses per kilometer of cable, right?

    They can try to wrap this with libraries and schools, but those entities are funded through local and state governments. As far as healthcare goes, it seems the only thing the US government is interested in funding is marble paneling for the lobbies of Eli-Lily and Phizer.

    I guess my question is, how much new cable is actually being laid in rural America? Aren't the telcos much more focused on putting up cell towers and selling much more profitable wireless plans?

    What exactly is a provider of two-way communication? Does that mean that every web-site has to pay (since an http request and response is two-way)? Would it mean that Slashdot gets taxed but Drudge Report doesn't, because users can communicate with each other through the former?

    What about Skype? Does it mean I'll start getting a monthly bill for $0.00 (10.2 percent of what I pay) from Skype to cover this?

    What if, as a previous poster noted, I set up an asterisk box and route all my calls through a number in the UK, or Canada, etc? What if I start selling Canadian numbers here in Washington DC but my company is legally seated in the Caymans?

    All of that aside, this is just a letter sent to a Congressional committee, not a law and not even a bill. It was signed by 60 of 435 Reps, mostly so they can go home to their constituents and talk about how they are fighting that damned bureaucratic machine in Washington to win rights for rural America.

    It's also quite likely that none of the signatories actually want or expect this to go anywhere, because if it did they would have to explain in the next election why they made grandma pay taxes for her AOL account.

    Rest assured, this is going nowhere.

  • "a bipartisan coalition of [hick] legislators" wants to tax broadband. Maybe they should tax indoor plumbing and really bring up the living standards of their constituents.
  • from the article:
    ""If our residents are to be competitive in today's fast-paced, technology-driven global marketplace, our communities will require affordable high-speed, high-capacity access to data and information over the Internet," Rep. John Peterson, R-Penn., co-chairman of the Congressional Rural Caucus, said at a press conference held the day the letter was released. "If the private sector is either unwilling or unable to provide that service at an affordable price, we'll find a way to provide it for
  • As someone who pays an extortionate rate of £20/month for shitty 31k dialup because my phoneline is maintained by shitheads, then I am glad of this tax. It's about time those priviledged people were punished for having things better than me, and about time something actually went my way rather than against me, like 99.999999% of everything that's happened in my entire life..

    Maybe now websites will not mean 150kb of download for 15kb of information (which is 90% fluff and filler).

    Now excuse me I'm go
  • by kiddailey ( 165202 ) on Friday July 01, 2005 @11:47PM (#12967277) Homepage

    Dammit -- we do not need more taxes! ESPECIALLY on communication services and ESPECIALLY when every U.S. citizen with a telephone is still paying the Spanish-American war temporary tax from 1898 [lp.org] .

    We do not need more taxes. We need a more efficient government.
  • I'm all for socialized funding and provision of network services in our nation, but it's an all or nothing bit. If the government is going to skim off money from us for a service we're already paying for, it does neither us nor the industry any good (it just means more money for the government to spend willy-nilly). I sound like a conservitive, but I'm a socialist. The fact of the matter is that we already pay for this service, and such a tax is not benefitting society as a whole.
  • Taxes on Broadband:

    Total taxation of the internet is coming, they are just seeking market saturation .

    They want to reduce cash purchases because it is harder to manage the taxation of it .

    The more commerce that goes online , the more they can skim from it
    is the darker alterior motive, and thus the early tax free
    incentive . Though mail order has been tax free for a long time
    the make it out like they were giving us something . Total BS .

    I do not think the vast majority of ppl realize the total tax burden

Today's scientific question is: What in the world is electricity? And where does it go after it leaves the toaster? -- Dave Barry, "What is Electricity?"