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New tax for broadband customers?
CNET News.com ^ | Fri Jul 01 2005 | Anne Broache

Posted on 07/02/2005 1:25:00 AM PDT by newzjunkey

Many broadband customers will pay new universal service taxes akin to those on their telephone bills if Congress bows to suggestions from rural legislators...

The USF currently collects a fixed percentage of revenues from long-distance, wireless, pay phone and telephone companies so that it can pass on subsidies to low-income customers, high-cost areas, and rural health care providers, schools and libraries. Most companies come up with their share, set for this quarter at 10.2 percent, by charging their customers a fee.

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...

"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... "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 ourselves."

The wireless industry applauded the proposed change "since wireless consumers are significant and disproportionate payers into the universal service and intercarrier compensation systems," Steve Largent, CEO of CTIA - The Wireless Association, said in a statement...

The Universal Service Fund in recent years has faced allegations of waste, fraud and abuse. The FCC announced in June a formal inquiry into its management.

(Excerpt) Read more at news.com.com ...


TOPICS: Business/Economy; News/Current Events; Technical
KEYWORDS: broadband; energyandcommerce; fcc; fees; johnpeterson; longdistance; newtaxes; payphone; stevelargent; subsidies; tax; telcomact1996; telephone; universalservice; usf; voip; wireless
The Steve Largent pushing for this on behalf of the wireless industry is the same as the football player and ex-Congressman (R).

Do we really need these fees, taxes and subsidies?

Does anyone know about this "Rural Caucus" leanings? I never heard of them before and this proposal seems to be flying a bit under the radar.

The House is debating the Telecommunications Act of 1996 which spawned the so-called Universal Service Fund (USF). The USF is under the FCC's control. Sixty-two House members signed the letter, supposedly in a bipartisan fashion.

1 posted on 07/02/2005 1:25:01 AM PDT by newzjunkey
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To: newzjunkey

Still paying for the Spanish-American War....


2 posted on 07/02/2005 1:41:48 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: newzjunkey

Anyone who can see the southern sky CAN get broadband now by satellite. No need to suck on the taxpayer tit for this.


3 posted on 07/02/2005 1:46:33 AM PDT by Kozak (Anti Shahada: " There is no God named Allah, and Muhammed is his False Prophet")
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To: endthematrix

You can only milk the goat so much before you yank the teat right off.


4 posted on 07/02/2005 1:47:56 AM PDT by cyborg (http://mentalmumblings.blogspot.com/)
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To: Kozak

They'd likely go after satellite as well.

Isn't all internet access and ISP service taxed already?
And, hasn't it occured to these nippleheads that raising taxes cuts revenue (Remember cigarette taxes?)?


5 posted on 07/02/2005 1:50:12 AM PDT by RandallFlagg (Roll your own cigarettes! You'll save $$$ and smoke less!(Magnetic bumper stickers-click my name)
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To: newzjunkey
so that it can pass on subsidies to low-income customers, high-cost areas, and rural health care providers, schools and libraries

From each according to his abilities, to each according to his needs. - Marx

6 posted on 07/02/2005 1:52:49 AM PDT by glock rocks (Git er done!)
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To: newzjunkey

I'm considering soon taking a three or four month internet vacation, and unplugging my broadband at home and work. This helps the decision a little, based on principle alone.


7 posted on 07/02/2005 2:16:40 AM PDT by SoDak (I saw the light)
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To: newzjunkey
Phone taxes are supposedly used to install phones in rural areas where it would otherwise not be cost-effective to run copper.

Broadband certainly did change the way I live and work. A small tax could send broadband to rural areas and increase business in the long term.

Right now most rural areas could only get satellite broadband. It is usually slow, unreliable with bad customer service, and high priced.


But of course I'm thinking of a dream world where people are taxed fairly and taxes are not wasted. It's most likely the phone companies whining about losing customers to on-line phones.
8 posted on 07/02/2005 2:20:08 AM PDT by varyouga
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To: Abram; Alexander Rubin; AlexandriaDuke; Annie03; Baby Bear; bassmaner; Bernard; BJClinton; ...
Libertarian ping.To be added or removed from my ping list freepmail me or post a message here
9 posted on 07/02/2005 2:34:43 AM PDT by freepatriot32 (www.lp.org)
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To: newzjunkey

FCC's strategic goal for Broadband
http://www.fcc.gov/broadband/

Does the FCC Require That Phone Companies Recover Their Universal Service Contributions From Their Customers?

The FCC does not require companies to recover their contributions directly from their customers. Each company makes a business decision about whether and how to assess customers to recover Universal Service costs.

Although it is not mandatory that companies charge a Universal Service fee to help recover their contributions to the fund, most do. Companies that choose to collect Universal Service fees from their customers cannot collect an amount that exceeds their contribution to the Universal Service Fund.

http://www.fcc.gov/cgb/consumerfacts/usfincrease.html


Congressional Rural Caucus
http://www.house.gov/johnpeterson/ruralcaucus/telecomtaskforce.htm


10 posted on 07/02/2005 2:40:00 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: glock rocks
From each according to his abilities, to each according to his needs. - Marx

And Hillary.

11 posted on 07/02/2005 2:41:47 AM PDT by Graybeard58 (Remember and pray for Spec.4 Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: RandallFlagg
Remember cigarette taxes?

Hmmmm. . . can I grow my own ISP?

12 posted on 07/02/2005 2:44:00 AM PDT by Flyer (I'm looking for the FReeper that recommended Glory brand canned greens)
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To: newzjunkey
"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... "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 ourselves."

This is horse crap. Anyone ever tell this guy about DirecWay, or some other satellite internet system? At any rate, his constituents' choice of homestead should not infringe upon my pocketbook. I live in the city. I don't get the benefits of living in a rural community. Can I dip into the pockets of the rural citizens to buy some "night sounds of the wilderness" CDs?

13 posted on 07/02/2005 2:44:24 AM PDT by Recovering_Democrat (I'm so glad to no longer be associated with the Party of Dependence on Government!)
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To: newzjunkey

Destroy the USF. This tax needs to go.


14 posted on 07/02/2005 2:47:18 AM PDT by YOUGOTIT
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To: RandallFlagg
This is crap anyway! I didn't have DSL till about 6 months ago. All we had to do is get a CLEC to show interest in moving here and "viola", DSL came to East Texas via SBC. Then cable TV offered it also. 10 months ago, if you asked, its not cost effective to bring DSL here. All the sudden, we have competition.I don't see how taxes would have changed anything.

I do admit though, I bet there isn't 150 DSL lines in my 2800 county. Not much room for profit. The cable company bills you for how many megabits you recieve, what a crock.

15 posted on 07/02/2005 2:52:21 AM PDT by chuckles
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To: SoDak

I'm getting to that point also.


16 posted on 07/02/2005 2:56:20 AM PDT by Dallas59 (" I have a great team that is going to beat George W. Bush" John Kerry -2004)
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To: Recovering_Democrat
"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 ourselves."

Ah, wielding government legitimacy through extortion and theft.

17 posted on 07/02/2005 2:57:33 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: newzjunkey
We don't need another stink'n tax - them Assbites.
18 posted on 07/02/2005 3:03:20 AM PDT by demlosers (Allegra: Do not believe the garbage the media is feeding you back home.)
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To: newzjunkey
Advocacy for local rights

http://www.telecommunityalliance.org/mission.html
19 posted on 07/02/2005 3:06:42 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: Flyer
Hmmmm. . . can I grow my own ISP?

Well, I think you know what I was talking about there: the consumer creates a greater demand for a product that the government sees as profitable to their pockets through more taxation.
But as far as looking at your statement with a series eye, why not? Growing your own tobacco to save cost should be no different than starting your own ISP. Price would be a lot different: launching the satellite, running the wiring to the service, fullfilling all state and federal requirements and regulatonary responsibilities to proceed, etc.
20 posted on 07/02/2005 3:07:55 AM PDT by RandallFlagg (Roll your own cigarettes! You'll save $$$ and smoke less!(Magnetic bumper stickers-click my name)
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To: newzjunkey
Isn't this Universal Service tax the 'Al Gore' tax. The tax voted on by 2/3 of Clinton and Gore? By fiat.
A tax that was to increase to approx. 8% of your long distance phone bill.
Wasn't this tax supposed to connect all the poor school districts to the internet?
Now it's high speed service for residents.
21 posted on 07/02/2005 3:07:57 AM PDT by Vinnie
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To: Vinnie

One of these days people are going to wake up to the fact that there is no advantage to working your ass off to become part of the middle class and pay taxes.
Sit back and let the government take care of everything.

Then what.
( darn it's only 6:15 AM, I should be really pi$$ed by 8)


22 posted on 07/02/2005 3:17:00 AM PDT by Vinnie
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To: Vinnie
"Then what."

Then you are French.

23 posted on 07/02/2005 3:26:46 AM PDT by Truth29
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To: Kozak

They'll go after satellite broadband as well. Satellite TV is not taxed in many states, but the cable companies have been lobbying Congress to have satellite TV taxed. Some states have bowed to pressure and have begun taxing satellite TV, all because cable feels threatened by competition. That's the only reason why cable companies have been going this route.


24 posted on 07/02/2005 3:27:09 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: newzjunkey

The power to tax is the power to destroy.


25 posted on 07/02/2005 3:28:03 AM PDT by Lazamataz (Looks like the Supreme Court wants to play Cowboys and Homeowners.)
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To: Vinnie

Under the 1996 Act, all Americans are to have access to the benefits of the information superhighway - schools, libraries, hospitals and clinics. I also found that it may be other principles that, consistent with the 1996 Act, are necessary to protect the "public interest" are to be decided by the FCC.


26 posted on 07/02/2005 3:29:45 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: Vinnie
Wasn't this tax supposed to connect all the poor school districts to the internet?

You're confusing the USF with E-Rate, which was the subsidy used to wire disadvantaged areas to the internet, largely in rural areas by small local phone companies. By "wiring disadvantaged areas to the internet", that included wiring schools and community colleges to the internet and providing an "on ramp" for home users, whether they were accessing by dialup or xDSL. It's all smoke and mirrors. Not everyone could get broadband, and many were limited to one provider (usually the locally owned phone company) like myself.

27 posted on 07/02/2005 3:33:29 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: endthematrix
Under the 1996 Act, all Americans are to have access to the benefits of the information superhighway - schools, libraries, hospitals and clinics.

It's a lie. So-called "natioanl providers" have largely concentrated on urban areas, where they can reap the most. If Wildblue is anything like Starband, I'll be pretty irate, and end up eating the $299 install fee. So far, I haven't seen any demonstration site for Wildblue around these parts. Having been to a Starband demonstration, I wasn't at all impressed. My 56k dialup was much faster.

28 posted on 07/02/2005 3:38:33 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: BigSkyFreeper; Vinnie
Nope. The E-rate is one part (schools and libraries) of USF.
29 posted on 07/02/2005 3:41:23 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: BigSkyFreeper
Bandwidth is quickly eatened when a provider sets up shop.
30 posted on 07/02/2005 3:42:57 AM PDT by endthematrix (Thank you US armed forces, for everything you give and have given!)
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To: varyouga

I don't see why its a good idea for urban Americans subsidize those in rural areas. Things like cheap broadband and communication bandwith in general, is an added reason for people to move to the cities. By forcing urbanites to subsidize rural people, we are causing a missallocation of resources.

Of course the broadband tax may only be a few dollars a month, so it by itself doesn't mean much. But I've seen this type of thinking in quite a few areas, and it does start to add up. Anotehr example is electricity where it is much cheaper to bring electricity to metropolitan Americans, but they end up paying the same flat rate as rural Americans anyway.


31 posted on 07/02/2005 3:44:34 AM PDT by ran15
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To: Vinnie

If everything is equalized anyway, there is no reason to even try to make things cost effective.


32 posted on 07/02/2005 3:48:55 AM PDT by ran15
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To: Truth29
Then you are French.

Not possible, I insist on bathing once a week whether I need it or not.

33 posted on 07/02/2005 3:50:13 AM PDT by Vinnie
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To: endthematrix

Absolutely. The first handful of customers already on Wildblue will be disappointed when the 4mb/sec pipe is scaled back and more customers sign on.


34 posted on 07/02/2005 3:51:12 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: Recovering_Democrat

Exactly they chose to live in a rural area. One of the disadvantages of a rural area, is services are a lot more expensive to deliver. But there are advantages.

Maybe the rural person wouldn't mind financing urban Americans travel expenses to nice scenic parks and wilderness fun?


35 posted on 07/02/2005 3:51:50 AM PDT by ran15
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To: Kozak

Not really. Satellite Internet delays don't work too well for internet phone or vpn.


36 posted on 07/02/2005 3:54:24 AM PDT by I_dmc
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To: ran15

It's cheaper in a large city because the provider doesn't have to trench a single wire dozens of miles to one single person's home. Fiber is ridiculously expensive, which is why you don't see a huge movement to start laying down fiber to every home or business in this country. They could do it, but the providers would still end up passing the "savings" onto the customer.


37 posted on 07/02/2005 3:55:37 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: BigSkyFreeper

Yep same with electricity. A lot cheaper to hook up a huge apartment building with a ton of residents, then digging trenches between a bunch of homes. Or putting power lines up, then maintaining them.

There is also economies of scale going on. Where you can have maintenance crews and server technicians with a constant workflow, and little travel time. And specialized equipment in addition.

If it wasn't for our major cities being liberal meccas, stopping growth and doing crazed socialist engineering, I think many more people would move towards the major centers, as the cost of living would be so much cheaper.

The Chinese with their super dense cities are throwing in broadband like crazy right now.


38 posted on 07/02/2005 4:13:53 AM PDT by ran15
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To: Vinnie

One of these days people are going to wake up to the fact that there is no advantage to working your ass off to become part of the middle class and pay taxes.
Sit back and let the government take care of everything.

Then what.


____

Then you go back to taxing the richest 1% uh, I mean 2%.


39 posted on 07/02/2005 4:20:35 AM PDT by WakeUpAndVote (Democrats, Socialists........................ Is there really a difference?)
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To: WakeUpAndVote

One day you won't even be able to make it to the middle class by working your ass off.


40 posted on 07/02/2005 4:22:46 AM PDT by Wolfie
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To: Kozak

"Anyone who can see the southern sky CAN get broadband now by satellite."

Yes...I use Direcway. It's a great service...just don't expect too much whenever it rains.


41 posted on 07/02/2005 4:23:53 AM PDT by Navydog
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To: Nightshift

ping


42 posted on 07/02/2005 4:25:40 AM PDT by tutstar ( <{{--->< OurFlorida.true.ws Impeach Judge Greer)
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To: newzjunkey

So we have to subsidize farmers' kids surfing porn and downloading illegal songs, software and movies? Wonderful.


43 posted on 07/02/2005 4:28:05 AM PDT by montag813
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To: ran15
The Chinese with their super dense cities are throwing in broadband like crazy right now.

Of course, funded by the government no less. My local telephone company is my local internet provider and they've been providing ADSL to the cities they serve for years now. Broadband for what it's worth hasn't given me any incentive to move into town. The phone company and electric company know me personally, and if I have a gripe with either one, they're right on top of it the moment I speak up. I can't say that about the internet provider. The tech support is a couple of incompetant rubes. I've actually solved more customer problems than they have. It's how I make a living.

44 posted on 07/02/2005 4:28:34 AM PDT by BigSkyFreeper (Whop-bobaloobop a WHOP BAM BOOM!!)
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To: newzjunkey

Thanks for the information. Good post.


45 posted on 07/02/2005 4:47:46 AM PDT by PGalt
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To: varyouga

Here's an idea:

Let companies decide where they will provide service, and let people decide where they will live!

Why spoil freedom with governments forcibly taking money from some people to give to others?

Should we transfer some of the peace and quiet enjoyed by the rural folks to the cities, just to make THAT fair, too?


46 posted on 07/02/2005 8:37:28 AM PDT by Atlas Sneezed
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To: varyouga

Here's an idea:

Let companies decide where they will provide service, and let people decide where they will live!

Why spoil freedom with governments forcibly taking money from some people to give to others?

Should we transfer some of the peace and quiet enjoyed by the rural folks to the cities, just to make THAT fair, too?


47 posted on 07/02/2005 8:38:14 AM PDT by Atlas Sneezed
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