WASHINGTON--New broadband taxes may be on the horizon, if an influential senator and his like-minded colleagues get their way.
At a Tuesday hearing convened by the Senate Commerce Committee,
several senators from largely rural states called for expansion of the Universal Service Fund (USF), a multibillion-dollar pool of money that's currently used to subsidize telecommunications services in rural and other high-cost areas, schools and libraries.
Committee Chairman Ted Stevens, an Alaska Republican who counts himself among the fund's staunch supporters, said Tuesday that "without
Universal Service, just having a dial tone would average about $200 per
month" for many residents in his home state.
Right now, long-distance, wireless, pay-phone and wireline telephone
services are required to contribute a fixed percentage of their revenues
to the fund, which they typically do by tacking an additional fee onto
their customers' bills.
But supporters of the fund, which gives out on average more than $5
billion each year, say it has dwindled because traditional services,
such as long-distance, are taking in less money, while unanticipated
voice technologies, such as voice over Internet protocol (VoIP), are not
expressly required to pay up. (A number of the larger voice over
Internet protocol providers, including Vonage, have said they already pay into the fund, but there doesn't appear to be a formal regulation requiring them to do so.)
Several senators said they want to change that by making USF
contributions "technology neutral," which for many means scooping up
broadband services both as contributors to--and benefactors of--the
fund. The debate reflects Congress's broader attempt this year to
update the 1996 Telecommunications Act, which critics have deemed outdated because it fails to
account for the explosion of the Internet.
Stevens, for one, said he thinks all "communications" services, which he
defined for reporters after the hearing as "transmitting knowledge from
one person to another," should be forced to pay into the USF. "I believe
fax is a communication, I think e-mail is a communication, and I do
believe they all should contribute," he said.
He isn't the only one. Sen. Conrad Burns, a Montana Republican on the
Commerce Committee, introduced a bill earlier this month that would require contributions
from "every provider of "telecommunications, broadband service or
broadband voice service," including all cable, DSL, spectrum, and other
broadband providers.
His bill, however, appears to word its contribution mandate for
"broadband voice" services broadly enough to include not only voice over
Internet protocol providers but also free, voice-based instant messaging
services. Derek Hunter, a spokesman for Burns, told CNET News.com
recently that his boss's bill isn't intended to sweep up the latter
breed of services.
Politicos in the U.S. House of Representatives are also drafting a proposal designed to
restructure the subsidies in a similar way, so that they can be used
toward deployment of broadband as well as traditional telephone service.
Who pays? At Tuesday's hearing, debate also centered on the appropriate
methodology for the Federal Communications Commission to use to
determine payments to the fund. Representatives from smaller cable and
telecommunications companies urged the senators at Tuesday's hearing to
leave federal regulators the flexibility to settle on any tactics they
please.
FCC Chairman Kevin Martin has indicated he is leaning toward a "numbers-based" approach,
in which anyone with a phone number would pay into the fund. The
National Cable and Telecommunications Association, and the VON
Coalition, which represents VoIP interests, also support that approach.
"Simply to say that broadband as broadband, whatever that might be, has
to pay into USF would be an error, but the telephone service portion of
that certainly should pay into USF," Tom Simmons, vice president of
public policy for Midcontinent Communications, a small South
Dakota-based cable company, told the senators.
Paul Garnett, assistant vice president of regulatory affairs for the
Cellular Telecommunications Industry Association, countered that a
numbers-based approach would be unfair. He said the cell phone industry,
which already pays into the fund, thinks broadband providers should also
have to pay a fee for each active connection--what it calls a
"capacity-based" approach.
Though all the senators at Tuesday's hearing clearly agreed on the
need for USF reform, their priorities differed. For instance, Jim
DeMint, a South Carolina senator who has introduced a broadly deregulatory proposal advocated phasing out USF handouts entirely in certain areas where new broadband
technology is actually less inexpensive to deploy than its telecommunications predecessors.
"As we look for fairer ways to spread the cost out," he said, "I think
we need some ideas on how we can move areas away from subsidization and
move into competition."
"Stevens, for one, said he thinks all "communications" services, which he defined for reporters after the hearing as "transmitting knowledge from one person to another," should be forced to pay into the USF. "I believe fax is a communication, I think e-mail is a communication, and I do believe they all should contribute," he said."
With a definition that broad you could, in theory, include television, radio, CB radio, two cans and a string, etc. I think Stevens needs to have his head checked to make sure his last marble hasn't fallen out.
USF - to provide services which are more expensive in rural areas? Maybe the rural guys should pay one URF for maintaining roads in the cities and pay another UHF for maintaining health for city dwellers because it is more expensive to do so in the cities. I am pretty sure the senators propose such bills due to lobbying by the telecom companies.
Politicians are finally getting their way TAXING THE INTERNET. Come on people. Don't buy it for a second that it's intended to finance access in rural areas or whatever. This is the ticket in they want to start taxing the internet in the same manner everything else gets taxed in the real world. Think about it. We're taxed on every little thing we do, buy, and eat. The internet has been the untouched child. Not anymore.
Just my opinion but you got it all the way. The internet is just another source of income for them. They are trying to reign in something they view as having no control over (so that makes it SCAREY), eh?
You move to the middle of nowhere, and we're supposed to contribute to your internet bill? And broadband at that? How about you get dial-up and use it on top of those phone lines we bought you.
of any sort available. Obviously you people are a bunch of snobs. Subsidies do work. Albeit not efficiently. But then again its you snobs that have broad band living in major rural and urban areas like Albany NY that administers these programs isnt it.
Time Warner will not bring road runner through my street unless it has a density of 25 houses per mile. Thats what they tell me. But my street does not have million dollar houses on it. Not two miles from me there is a street with half million and up houses and there are only 8 in a mile yet they have broadband. Hmmmm.
It took two minutes for the CNet page to load. It took me fifteen minutes to read your arrogant replies.
I don't believe any one is trying to be 'snobbish' and some of them do have a point. It is something to consider before purchasing or renting a home. One cannot assume that services other than a telephone will be available in all areas.
You say that 2 miles away from you is a street that has broadband, yet they do not have the appropriate number of houses on the street. Well, cabling has signal limitations (in feet) and repeaters cost money too. Could be they are at the end of the line and the company figured they might as well run the cable.
I feel your pain as I live in an area that does not offer broadband, but I knowingly made this choice. I would suggest that you invest in satellite broadband. It is pricey at $600 just for equipment and install, but if you have your heart set on faster net speeds, it may be worth it to you.
I hear you. We had to put in our own system using wireless and directional antennas in order to get broadband. The alternative was to wait a _very_ long time for the monopolies to come out.
Much of the original equipment was recycled from a dead dot-com, so I can't actually suggest that this is practical for everyone. . . The fact is that current technology is pretty good for suburbs and high-density areas, but falls down badly in semi-rural areas. (We're right around 25 houses per mile.)
I think that the real solution to low-density broadband is a hybrid system of power-line trunks and wireless last-mile.
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Alaskans are welfare queens. Maybe we should <a href="#">sell it back to Russia</a>.
With a definition that broad you could, in theory, include television, radio, CB radio, two cans and a string, etc. I think Stevens needs to have his head checked to make sure his last marble hasn't fallen out.
I am pretty sure the senators propose such bills due to lobbying by the telecom companies.
TAXING THE INTERNET.
Come on people. Don't buy it for a second that it's intended to finance access in rural areas or whatever. This is the ticket in they want to start taxing the internet in the same manner everything else gets taxed in the real world. Think about it. We're taxed on every little thing we do, buy, and eat. The internet has been the untouched child. Not anymore.
Shameless.
Time Warner will not bring road runner through my street unless it has a density of 25 houses per mile. Thats what they tell me. But my street does not have million dollar houses on it. Not two miles from me there is a street with half million and up houses and there are only 8 in a mile yet they have broadband. Hmmmm.
It took two minutes for the CNet page to load. It took me fifteen minutes to read your arrogant replies.
Parasite.
You say that 2 miles away from you is a street that has broadband, yet they do not have the appropriate number of houses on the street. Well, cabling has signal limitations (in feet) and repeaters cost money too. Could be they are at the end of the line and the company figured they might as well run the cable.
I feel your pain as I live in an area that does not offer broadband, but I knowingly made this choice. I would suggest that you invest in satellite broadband. It is pricey at $600 just for equipment and install, but if you have your heart set on faster net speeds, it may be worth it to you.
Good luck.
using wireless and directional antennas in order
to get broadband. The alternative was to wait
a _very_ long time for the monopolies to come out.
Much of the original equipment was recycled from
a dead dot-com, so I can't actually suggest that
this is practical for everyone. . .
The fact is that current technology is pretty good
for suburbs and high-density areas, but falls down
badly in semi-rural areas. (We're right around
25 houses per mile.)
I think that the real solution to low-density
broadband is a hybrid system of power-line trunks
and wireless last-mile.