Silva's project, called p2pCommunity, is designed to appeal to groups of 2 to 100 people who want to collaborate on writing papers or designing software applications. He's already made a pre-alpha release available at no cost on the SourceForge distribution site.
Thanks to a bizarre move by Congress last week, p2pCommunity and hundreds of similar projects could end up paying taxes to state governments to prop up the antediluvian scheme of running copper wires to rural households for analog phone service.
One of the biggest problems for these tax-happy members of Congress is what to do about overseas firms like Skype, which is based in Luxembourg.
"Open-source software like mine can't pay any taxes, so the audio chat features of the program may need to be taken off of the program, or the users will need to pay the tax to use it," Silva says.
It's not clear why programmers like Silva and companies offering commercial voice software must subsidize rural telephone companies. By that logic, Congress should have forced Henry Ford to pay for horse troughs. It should have also extorted cash from laser printer manufacturers on behalf of the dying manual-typewriter industry.
"(Congress is) asking us to tax e-mail to support the U.S. Postal Service," says Jason Talley, CEO of Nuvio, which sells voice over Internet Protocol, or VoIP, service. "Asking us to support the current Universal Service Fund is patently unfair."
Perhaps these "Universal Service" taxes should apply to VoIP companies like Vonage and 8x8, which let their customers make calls through the old telephone network. It may not be a great idea, but it edges closer to being reasonable: They're using the network some of the time.
But why in the world must we tax software for voice chats? Dozens of open-source projects on SourceForge offer that feature. Yahoo's instant-messaging client, Apple Computer's iChat application and a growing number of video games carry voice conversations over the Internet. If they don't use the old phone network, why must they subsidize it? Why not tax e-mail, too?
Twin threats
Two bills in Congress take this chronologically backward approach.
The first is an amendment that Sen. Byron Dorgan, D-N.D., glued onto an otherwise promising VoIP bill last Thursday. It lets states levy Universal Service taxes on "providers of a VoIP application," which is defined as any software permitting "multidirectional voice communications." (That bill has been approved by the Senate Committee on Commerce and is awaiting a vote by the full Senate.)
Dorgan's legislation opens the door to state taxocrats targeting SourceForge projects and companies like Apple, Yahoo, and Microsoft that offer chat clients. It's not clear whether Dorgan meant to target programmers providing free software, but that's what his amendment says.
"Providers of voice applications and chat services should be concerned, because the bill, in its present form, injects uncertainty into an area where people thought the rules of the game were pretty much settled: that regulation(s) and taxes would only apply if you offered voice service for a fee and touched the (public switched telephone network)," says Larry Blosser, a lawyer at Gray Cary.
The second bill, sponsored by Rep. Rick Boucher, D-Va., covers only commercial Internet voice services, so SourceForge projects and free services like Free World Dialup are off the hook. What would be taxable: If Yahoo or AOL offered a subscription-based Internet audio chat client, or if Apple included it with its $100-a-year .Mac package, or if Skype or anyone else decided to charge for a VoIP service that sounded better than a free version.
In one way, Boucher is even more ambitious than his Senate counterpart. His proposal authorizes the Federal Communications Commission to levy 911 regulations, access requirements for the disabled and Universal Service taxes on chat software--even though it has nothing to do with the public telephone network. How would dialing 911 work on a PlayStation 2 equipped with Sony's forthcoming EyeToy Chat feature, anyway?
"Our intent is not to impose Universal Service obligations on providers of free services," Boucher told me. "For example, if Skype continues as a free service, it would not have any Universal Service responsibilities under this bill. On the other hand, if (MSN) or AOL decided they wanted to offer VoIP as a service to their subscribers, then they would be responsible for contributing to the Universal Service Fund."
While both Dorgan and Boucher are Democrats who typically vote for higher taxes, enthusiasm for Universal Service policy is nearly as strong among Republicans who represent rural areas. And because some Universal Service taxes are diverted to causes like schools, libraries and health care, the concept has become politically difficult to oppose--never mind that the Universal Service Program is rife with fraud and waste.
One of the biggest problems for these tax-happy members of Congress is what to do about overseas firms like Skype, which is based in Luxembourg. Why would those companies pay any more attention to tax demands from the United States than they would demands levied by Zambia?
Free projects are even more widely scattered around the globe. Silva, the primary programmer behind P2PCommunity, lives in Curitiba, a city in the Brazilian state of Parana. "I don't know how the U.S. government can tax an international program that uses VoIP," he says.
"This is for the (FCC) to do," Boucher said. "That's why we have a commission. I think that could be an interesting question to be posed at a hearing."
That's not much of an answer. Here's an alternative approach: Leave the Internet alone.
Biography
Declan McCullagh is CNET News.com's chief political correspondent. He spent more than a decade in Washington, D.C., chronicling the busy intersection between technology and politics. Previously, he was the Washington bureau chief for Wired News, and a reporter for Time.com, Time magazine and HotWired. McCullagh has taught journalism at American University and been an adjunct professor at Case Western University.
Rural areas are future suburban and urban areas. They are anything but irrelevant. It is cost effective to install(needed) hardwire before urbanisation occurs. The questions should be whether it will really be needed at the time they will be inhabited, and whether it is the proper role of government to force this action at all.
Dave
Rural areas are future suburban and urban areas. They are anything but irrelevant. It is cost effective to install(needed) hardwire before urbanisation occurs. The questions should be whether it will really be needed at the time they will be inhabited, and whether it is the proper role of government to force this action at all.
Dave
May God Help us All
Larry M Lord
May God Help us All
Larry M Lord
I dont see any checks comming from the federal gov while I sit 10 - 15 hours a day behind a keyboard peering over millions of lines of code. So why should they be the first in line with a hand out when I get it done? How about fitting the bill for costly test hardware and R&D time in pre-development? No wont see that anytime soon. Just like the gross abuse of temp staffing agencies that lock down IT jobs that pay 70 - 100K a year with benefits and farm it out for pennies on the dollar with no benefits.
The reason I started developing software on my own is because after 6 years in an IT job "through a staffing agency" the company sold the jobs over seas and because I was "temp" I was not technically an employee and did not qualify for separation benefits. I got a phone call saying I did not need to come into work "my contract was ended".
The Fed wants to tax something? Tax temp staffing on a graduated scale for employees over 1 - 2 year marks so that its more attractive to actually push for companies to hire on directly.
Its my opinion that the US and its corporate ideals have turned from competition and dog eat dog business tactic to parasite. Every new start up seems to target a way to get more from the US workforce and pay less for it. I wonder how long before they push a 50 hour work week?
- They can tax it when they help develop it.
- by August 17, 2004 8:04 AM PDT
- I am a software developer and its my opinion that they can tax it when they fund the development of it.
- Reply to this comment
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(12 Comments)I dont see any checks comming from the federal gov while I sit 10 - 15 hours a day behind a keyboard peering over millions of lines of code. So why should they be the first in line with a hand out when I get it done? How about fitting the bill for costly test hardware and R&D time in pre-development? No wont see that anytime soon. Just like the gross abuse of temp staffing agencies that lock down IT jobs that pay 70 - 100K a year with benefits and farm it out for pennies on the dollar with no benefits.
The reason I started developing software on my own is because after 6 years in an IT job "through a staffing agency" the company sold the jobs over seas and because I was "temp" I was not technically an employee and did not qualify for separation benefits. I got a phone call saying I did not need to come into work "my contract was ended".
The Fed wants to tax something? Tax temp staffing on a graduated scale for employees over 1 - 2 year marks so that its more attractive to actually push for companies to hire on directly.
Its my opinion that the US and its corporate ideals have turned from competition and dog eat dog business tactic to parasite. Every new start up seems to target a way to get more from the US workforce and pay less for it. I wonder how long before they push a 50 hour work week?