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What could possibly be wrong with the idea? It helps the kids.
But when a politician uses children to justify a plan it is time to quickly grab your wallet and your liberties as at least one of the two is about to be taken away. In this case President Obama has proposed a new tax to pay for his “ConnectED” proposal which made news again recently after being brought up during a press conference.
The President would like to increase the speed of Internet access at the nation’s public schools. According to a White House spokesman, “… we could connect 99 percent of schools all across the country to the Internet, and that would expand educational opportunities for students in a really important way.” But, the program is not about connecting more schools — in 2000 99 percent of public schools already had Internet access. Instead the President wants to increase the speed of the access in schools since the FCC said that half of the schools believe that they have slower Internet connections than an average home.
Is extra speed currently needed for any particular use, or if this is just a mere extension of former FCC chairman Genachowski’s wish list as he detailed last year. While he desperately tried to make that case that greater speeds were urgent, he in fact, provided no support to show that all that speed could be used for applications now or in the near future. Pushing speed is an exceedingly poor substitute for innovation, advancement or a bold new idea. And mere opinion should never be enough to move government policy.
Also not reported, according to the FCC, 91 percent of U.S. residents are pleased with their home broadband speed.
And why is that? Because speeds have gotten so fast that in fact there are precious few applications to even try to take advantage of it. Consumers don’t really care about some number, and frankly neither do schools. What is important is whether or not the school can accomplish what they want in education taking into account all resources, which includes adequate technology training for teachers, encouragement to integrate technology into a curriculum and having resources beyond fast broadband.
To cover the costs of the White House estimated $4-6 billion program the President has proposed raising taxes on monthly mobile phone bills. Being unwilling to negotiate with the U.S. Senate and U.S. House he is doing an end run around them, pushing a unilateral administrative tax increase through the FCC, adding to the mass of mobile phone taxes already burdening consumers.
Tax authorities, and now Mr. Obama, have seized upon the success of mobile communications, taxing mobile telecommunications services to stratospheric levels. Nationally, the average tax rate on wireless service is already at extortion levels of 17.2%, or nearly two-and-a-half times higher than the 7.4% average sales tax rate imposed upon other goods and services.
Even worse, specific localities are pushing the tax limits to new extremes: Baltimore City first imposed a $4.00 per line per month charge on inner city residents; Montgomery County, Maryland has increased their flat fee per wireless line from $2.00 to $3.50; and New York City residents face 10 separate city, state and federal fees and charges, not counting a high sales tax. Some states even go for a double dip by charging a sales tax and then adding a 4% or 5% gross receipts tax on wireless services. Overall, the effective rate of taxation on wireless services has increased three times faster than the rate on other taxable goods and services – clearly discriminatory treatment.
That discrimination drives up costs and drives down adoption with taxes higher than those placed on pornography, alcohol or gambling winnings. This fact has prompted Congress to act, introducing The Wireless Tax Fairness Act, to place a five-year moratorium on new or increased taxes in the states on wireless telecommunications infrastructure and services. And yet the President heads the opposite way. No wonder he is trying to force the tax via executive power rather than negotiate with Congress.
If we are to truly achieve a national goal of greater broadband adoption including more ubiquitous broadband in schools, then states, localities and the FCC, even if pushed by the President, cannot be allowed to continue the shameless pile up of discriminatory taxes on wireless communications.
I have heard several people over the years suggest some pretty crazy policy ideas related to the adoption of broadband, including one who suggested that if people will not adopt broadband in their house voluntarily that they might have to be forced to do so. Yikes!
At best, that sort of small-minded, authoritarian bullying should be a call to arms for those who are willing to be more inventive and helpful in finding more ways to encourage broadband adoption, as some are already doing.
Two years ago Comcast began its own program – Internet Essentials. The program is designed to get more students and families online by offering broadband and a home computer at drastically reduced prices for those who could least afford broadband. The program is on track to sign up more than one million Americans in its first two years, making a real dent in the number people without broadband at home.
And the program is not locking people into old technology, like many municipal broadband systems do since they rarely update the system. Speeds are increasing yet again, a tripling of the download speed as well as an increase in the upload speed.
Eighty five percent of Internet Essentials’ customers indicate that they use the Internet every day, most (a huge 98 percent) often for homework — the most popular use. But importantly, these low income families have also been using the online connection to try to better their situation. Fifty eight percent of the customers report that they have been using the broadband service to search and apply for employment.
So, at no expense to taxpayers, over the last two years, the Internet Essentials program has improved the education and employment situation, and opportunities for a million citizens. But the cable industry campaign does not end there. The NCTA, a trade association for the cable industry has a program that it began a couple years ago called Connect2Compete.
“Connect2Compete (C2C) is a national non-profit organization bringing together leaders from communities, the private sector, and leading foundations.”
“Through its programs and the power of technology, C2C will improve the lives of Americans – regardless of their age, race, or education level. C2C will help Americans access technology through Digital Literacy training, discounted high-speed Internet, and low-cost computers.”
More resources for those who are least advantaged in our country and an entire industry stepping up to improve broadband access and education for everyone, without government direction or requirement. These are the sorts of programs that should be cheered and encouraged.
Bullying and coercion certainly are not appropriate, nor are elaborate government entitlements. Essential though are companies doing what they can, stepping up to be good corporate citizens, and extending their hands to help those most in need.
Mark Twain once quipped, “All you need in this life is ignorance and confidence, and then success is sure.” If Twain is right then advertising, and now social media, has allowed us an unprecedented look into the world of success, the world of fact-free confidence. The recent very public scuffle between CBS and Time Warner Cable highlights one example.
The world of video delivery is an increasingly complicated, ever changing, competitive place. More and more competitors gain relevance such as Netflix and Redbox, even while most people receive their video “free,” such as CBS, via broadcast, or “pay tv” such as SportNet, via a cable or satellite provider.
The world of broadcast is heavily regulated including by the 1992 Cable Act, and specifically “retransmission” rules, that govern how video distributors carry signals from local broadcasters. These signals are supposed to be free, whether received over a “cable” or via an antenna on a roof, and these days such programming is free online as well. The retrans rules, in part, provide a gun for broadcasters to put to the head of the distributors, such as the cable companies, as the broadcasters can force the distributors to pay for and show their content under something called the “must carry” rule. Ultimately these restrictions have caused various policy disputes and contract fights between the parties. The result is that the public in some markets are threatened with program blackouts.
The world of “pay tv” is entirely different – unregulated and free market. Channels come and channels go. No one is forced to carry any programming, as they are obligated to do with broadcast signals. In a free market you might end up with shut down scenarios as content owners and content distributors haggle over new contracts, but it is clear that if programming ends it is because the two parties could not reach a business deal good for everyone.
So what is going on between CBS and Time Warner Cable? CBS has, without shame, taken to advertising, crying victim even as they demand a 600% premium from distributors. Viewers are left as the collateral damage of the CBS goal to make $1 billion in retrans revenue, a goal to profit $1 billion dollars from “free,” already ad supported, television. This leaves distributors with the option of giving more cash to CBS for “free” content or walk away, and possibly be forced to show the programming anyway. Not much of a choice.
Even worse is the intentional confusion foisted on consumers, taking advantage of the public ignorance of the arcane rules of retrans. Some have taken to social media to decry Time Warner Cable without the slightest understanding of the government’s twisted “marketplace.”
They compare the world of heavily regulated, government distorted market of “free” tv, with the real world, free market world of “pay tv.” It is a ridiculous comparison. When a consumer pays for a premium channel such as SportsNet they are paying for content that is made available through the distributor under contract with SportsNet. Only subscribers to pay television get this content. Paying for “free” television and paying for otherwise unavailable content – it is comparing, well, free to regulated.
CBS programming is available free over the air and online to anyone, and yet CBS puts a gun to the head of the distributor and holds the audience hostage. The consumer loses in every scenario – either not receiving CBS on their pay television service or ending up paying for “free” television, all while CBS runs ads trying to lay the blame on others.
CBS sure seems confident, playing on the ignorance of its consumers. Maybe they believe that is their recipe for sure success.
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