How to make broadband affordable
I’ll give you one guess as to what 62 of your legislators think.
A new tax- or rather an old tax applied to new technologies.
I’m talking about the Universal Service Fund, which was established as part of the Telecommunications Act of 1996.
The goal of the act is admirable-
“to promote the availability of quality services at just, reasonable, and affordable rates; increase access to advanced telecommunications services throughout the Nation; advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas at rates that are reasonably comparable to those charged in urban areas.”
This also includes schools and libraries.
So, the money comes from taxing long-distance, wireless, pay phone and telephone services and the providers of those services gladly put up the extra money for a good cause, right?
You probably already know that isn’t the case. The truth is that most companies simply pass the tax on to the consumer. You always wonder what that extra few bucks on your cell phone bill is , but never worry about it enough to complain about it.
Well, soon you may be able to feel the same way about your broadband connection and VoIP service too.
The legislators I mentioned earlier obviously think that the tax dollars are well spent (despite the formal inquiry recently announced), and will make things less expensive for everyone. Rep. John Peterson, R-Penn was even quoted on news.com as saying
“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.”
Let me break that down for you. Companies already don’t absorb the extra tax on existing services covered by the USF. The proposal is to expand the scope of the USF to increase the tax revenue. This ultimately means increase the tax burden on individuals and businesses. It’s brilliant. I mean if you don’t stop and think about it, they can almost convince you that it isn’t you that is paying for this. Sounds like there is already plenty of “providing it for ourselves” going on out there among these politicians within the industry.
How about trying this-
Instead of taxing services that small businesses need to compete with big businesses, why don’t you enact some legislation that will allow our markets to be more competitive? Or how about this, why not find a way to give local companies government contracts to make broadband access more widely available in rural areas? Help small business, local companies, and make broadband more accessible- now there’s an idea. Sounds a lot like work though. Why do that when you can just levy a small business and consumer tax instead?
If you don’t want your representative to waste your money either, find your elected officials and let them know.
If you don’t want to be really disappointed, don’t read the Foreign Affairs article Down to the Wire, about the efforts in Japan to make them a leader in high speed bradband access.
Excellent questions, Russ. The efforts in Japan show how it’s done – “Today, nearly all Japanese have access to “high-speed” broadband, with an average connection speed 16 times faster than in the United States — for only about $22 a month.”
Ironically, I was on the phone w/ Verizon yesterday inquiring about my inflated bill. It turns out that it was just some extra toll calls we made. When I asked what my total bill (w/o toll calls) would be, the agent told me what “Verizon charged”. I then told her that the numbers still didn’t add up and she replied, “Well the rest of those charges are taxes that GOVERNMENT CHARGES YOU to use OUR SERVICE…that statement is wrong too many levels to mention. I’m switching to Vonage but it sounds like I’ll get hit there too!