FCC Panel Wants To Tax Internet-Using Businesses, Give the Money To ISPs (arstechnica.com) 243
The FCC's Broadband Deployment Advisory Committee (BDAC), which includes members like AT&T, Comcast, Google Fiber, Sprint, and other ISPs and industry representatives, is proposing a tax on websites to pay for rural broadband. Ars Technica reports: If adopted by states, the recommended tax would apply to subscription-based retail services that require Internet access, such as Netflix, and to advertising-supported services that use the Internet, such as Google and Facebook. The tax would also apply to any small- or medium-sized business that charges subscription fees for online services or uses online advertising. The tax would also apply to any provider of broadband access, such as cable or wireless operators. The collected money would go into state rural broadband deployment funds that would help bring faster Internet access to sparsely populated areas. Similar universal service fees are already assessed on landline phone service and mobile phone service nationwide. Those phone fees contribute to federal programs such as the FCC's Connect America Fund, which pays AT&T and other carriers to deploy broadband in rural areas.
The BDAC tax proposal is part of a "State Model Code for Accelerating Broadband Infrastructure Deployment and Investment." Once finalized by the BDAC, each state would have the option of adopting the code. An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. The committee ultimately adopted a slightly more narrow recommendation that would apply the tax to subscription services and advertising-supported services only. The BDAC model code doesn't need approval from FCC commissioners -- "it is adopted by the BDAC as a model code for the states to use, at their discretion," Ajit Pai's spokesperson told Ars. As for how big the proposed taxes would be, the model code says that states "shall determine the appropriate State Universal Service assessment methodology and rate consistent with federal law and FCC policy."
The BDAC tax proposal is part of a "State Model Code for Accelerating Broadband Infrastructure Deployment and Investment." Once finalized by the BDAC, each state would have the option of adopting the code. An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. The committee ultimately adopted a slightly more narrow recommendation that would apply the tax to subscription services and advertising-supported services only. The BDAC model code doesn't need approval from FCC commissioners -- "it is adopted by the BDAC as a model code for the states to use, at their discretion," Ajit Pai's spokesperson told Ars. As for how big the proposed taxes would be, the model code says that states "shall determine the appropriate State Universal Service assessment methodology and rate consistent with federal law and FCC policy."
Gotta love it! (Score:5, Insightful)
We're letting *AT&T, Comcast, Google Fiber, Sprint, and other ISPs and industry representatives* write our tax code. I guess it's better than letting Enron, Exxon, and DuPont write them... Oh wait, they probably do
Re:Gotta love it! (Score:5, Informative)
And Facebook and Twitter [slashdot.org] is pushing to have phone taxed so that people will use their messaging and VOIP services.
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False. Right there in the write-up, don't even need to RTFA (emphasis mine):
Re:Gotta love it! (Score:5, Informative)
It has to be at the state level. A federal tax would violate the tax and spending Uniformity Clause [wikipedia.org] of the United States Constitution.
This is, of course, assuming anyone still cares what the Constitution says.
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Unless it was a tariff on the import and export of bits at the border, then it's fine. It is nice that we don't have a national sales tax, however.
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That's not what that means. That means that if it is done at the Federal level, the tax rate has to be same everywhere.
This is at the State level, because the FCC isn't Congress and can't pass a tax. And Congress would never do it, they have to stand for election.
You don't even say anything about what you think wouldn't be uniform.
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You don't even say anything about what you think wouldn't be uniform.
How many tech companies does Mississippi have?
Re:Gotta love it! (Score:5, Insightful)
False. Right there in the write-up, don't even need to RTFA (emphasis mine):
USF is a shining example of how not to implement a tax.
1. Regressive taxation of a (once) essential service. About as ridiculous as taxing food to subsidize food for the poor.
2. Tax rate is ambiguous and incalculable subject to unnecessary amounts of complexity where larger providers have inherent advantage to leverage their ability to do the necessary paperwork to pay a lower rate. Only the interstate component of telephone service is taxable so providers either have to use default "safe harbor" rate or conduct a "study" using a methodology the FCC has to sign off on to determine the effective tax rate given portion of service that is interstate.
To pour salt on the wound safe harbor rate for certain categories of telephone service is astronomical. Wireless safe harbor for example is half that of Internet OTT voice service for no reason other to fuck over small providers because they can.
the model code says that states "shall determine the appropriate State Universal Service assessment methodology and rate consistent with federal law and FCC policy."
Calculation methodology is irrelevant... AT&T and crew still controls who gets the money (themselves) and what rate will be subject to factors and criteria's set by states.
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What if a state decides to set it to zero? You'll still be outraged?
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Except, they are not — the very write-up directly contradicts your statement.
About as much as between "yes" and "no".
Re:Gotta love it! (Score:5, Informative)
You know what FCC just did? They just declared SMS to be an "information service" like internet, as opposed to communication.
That means now carriers can now choose to slow down, time-delay, or even block SMS any time they want.
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That means now carriers can now choose to slow down, time-delay, or even block SMS any time they want.
My own experience tells me that the first two are definitely already happening.
Revolution! (Score:2)
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Yes.... this is absolutely insane and stinks of ISP greed: this is a problem created mostly by the ISPs themselves and THEY should be paying a majority of the tax burden for it by having it subtracted from their profits. We should not be trying to tax internet-based businesses to fund something that has nothing to do with supporting these businesses.. we should be taxing every broadband connection above a certain peak theoretical throughput (e.g. 1.5 megabit) to individuals and for-profits with a bas
Re: Gotta love it! (Score:5, Insightful)
Also, don't internet business already, actually pay for connectivity? Like, million dollar contracts to backbone isps, which would include att and verizon? And don't subscribers pay?
How do they get away with this idiocy?
Nevermind the subsidies already mentioned.
I have no sympathy for google or even Netflix, but I do have sympathy for myself, because it is me that will be paying that tax.
Re: Gotta love it! (Score:2)
Re: Gotta love it! (Score:5, Interesting)
I'm pretty sure that companies will instead just get smart. For example, there's absolutely no reason NetFlix has to be a tax paying U.S. company at all. They can pretty much just pack up and move to Canada or Europe. We have room for them.
Then there's Amazon which would be more difficult to sort out, but if you simply move the corporation to Canada or Europe and then push orders to U.S. warehouses via leased lines or dark fibre, there shouldn't be any problems. Then Amazon could probably avoid paying 50% of what little taxes they already pay.
Google could probably save billions by leaving the U.S.
Microsoft wouldn't have to move very far at all to save a bunch of money.
I'm almost entirely sure that there's no real problems associated with this. And if I were a shareholder of any significance, I would consider suing any company which insisted in staying in the U.S. if something like this get passed.
I work for a telecom provider almost as big as AT&T. We have a presence in over 100 countries and we make money off of real estate. In some cases, this is literal in the sense that we rent offices and land that we own. In other cases, we rent and sell fiber as if it were real estate. The worst thing that could happen to us is if the content providers decided to pack up and move away from our networks into places where we would have to carry the data instead of providing it locally.
If we were a company like AT&T and were servicing the U.S. and then had to consider the risk of Netflix moving to Canada and moving all their proxies to Canada... or worse Europe, the cost of this to us would be so high we probably would collapse.
Consider that a website like Pornhub published on their technical blog live statistics a few years back of how much content they were delivering. It was approximately 300Tb/sec 24/7 worldwide. That means that there are just a massive number of one handed web surfers at every moment of every day sucking up bandwidth. If Pornhub were to consider moving their CDN outside of the U.S. and incorporating in the Cayman's for example, I would assume that service providers would have to increase capacity by at least 40Tb/sec to compensate for this.
Now consider that XVideos is supposedly bigger than PornHub (in this case it's not just the size, but the size surely matters) but they don't publish statistics like PornHub does. Now consider that YouTube and Netflix are A LOT bigger than either of those two sites.
The cost of just these 4 websites relocating to outside of U.S. borders would place at least 500Tb/sec additional burden on American service providers. Now, to anyone living in a first world country that has visited the U.S. (technically a first world country but second world in most categories other than money) they have horrible Internet access even when paying insane prices and they have miserable mobile/LTE coverage. I drove more or less the entire east coast on business and visiting friends and family last year and even Malta and Gozo were technically more advanced than America.... and those ARE shitholes.
Consider that while the FCC recently had a debate that suggested lowering the definition of broadband to 10/1 connectivity but due to lashback decided that 25/3 is what broadband is... across the first world, we can't even order anything that slow on our mobile phones anymore. How about in the Baltics where at least Lithuania and Latvia has 100Mb/sec fiber for like $15 a month in every house.
No... don't worry... you won't have to worry about footing the bill for this. In fact, we're more than ready to welcome Facebook, Microsoft, Amazon, etc... when they decide to just pack up and take their money and jobs with them.
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Tax nexus (Score:2)
I assume that LostMyBeaver was assuming that taxing authorities would use hiring a CDN to prove "nexus" for taxation.
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Re: Gotta love it! (Score:5, Informative)
Isn't pornhub mainly located in Canada? Montreal, specifically. But in any case, that also goes to show that moving out of the USA would probably be a trivial matter.
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Netflix, Google, Amazon, etc, get a large chunk of their connectivity through peering which is the same way that internet providers exchange traffic. This means that they will either collocate servers at an Internet Exchange Point or will build a datacenter close enough to one to be able to purchase/build dark fiber to it. At the exchange point, often the only fee is a one-time port cost or a minis
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Your point is well taken and I wonder how, for instance, Facebook is going to recoup the tax?
There's got to be a path to the membership's pocket for this to work. How do we get there? Ideas?
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"And they're gigantic beneficiaries from the broadband ecosystem."
The ISPs only exist because there are companies like Google, Facebook, Amazon, etc that make having an internet connection desirable.
Without them, there is no reason to pay an ISP. Who, really, is the "gigantic beneficiary" here?
If roads where private, would they tax stores? ( apparently, the answer is yes ).
It is a strangulation relation. It is extortion, not free trade.
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Farmers need Internet to farm (Score:2)
Also the fact that city zoning codes often prohibit productive gardening, as in the case when Oak Park threatened Julie Bass with jail time for growing a victory garden [go.com]. What Internet connection are farmers supposed to use to upload large files to their crop advisor [irlpodcast.org]?
Another money funnel to corporations? (Score:5, Insightful)
Re:Another money funnel to corporations? (Score:5, Insightful)
I thought that the reason we got rid of net-neutrality is because of our faith in the free market.
So why don't we just let the free market bring faster Internet to places that need it? Why do we need *both* an unregulated ISP market *and* tax-funded support for that market?
Of course I am being rhetorical. They want *all* of our money, every penny, and they will abuse every bit of power they have to get it.
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+1 underrated
Plus another tax and bureaucracy (Score:2)
Two things wrong with this plan.
You mentioned the first one: handing tax money to ISPs.
The second one:
We have far too many different taxes, and associated paperwork and bureaucracy, already. No need to invent a new type of tax. If we DID want to give taxpayer money to X, just write them a check and if that means increasing taxes, do it. Propose a 1% increase in the existing taxes to pay for it. We don't need 784 different taxes.
We had a discussion here on Slashdot about that last week.
Even before you see t
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Not in the US, but guessing this is a similar tax setup.
But as an employer I absolutely hate hate hate hate Payroll tax. It's technically not that much, and pales into insignificance compared to others. But I find something truly obnoxious about paying a tax to employ someone.
I hate filling out forms to pay $2.12 tax (Score:2)
When I had a small business, every year I had to fill out forms to pay business personal property tax of less than $5. The state actually called me, somewhat angrily, about another tax that was less than a dollar.
How much do you think it cost the state to provide an office, computer, etc, and pay the person, to call people about a 87 cent tax? Plus the cost of the forms, my time filling out the forms, etc. It's just a compete waste.
Re:I hate filling out forms to pay $2.12 tax (Score:5, Interesting)
Everything government does has a cost and no one in government has a clue about the real world.
Just my 2 cents
Re:I hate filling out forms to pay $2.12 tax (Score:5, Informative)
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3M didn't want to pay for your insurance (Score:3)
Actually, if you didn't have your own Worker's Comp policy as a subcontractor for 3M, then the insurance company covering 3M for Worker's Comp would have billed 3M for your coverage. Worker's Comp premiums are based off of payroll and it's an accounting exercise to correlate payments to subcontractors with their WC policy numbers to then deduct those amounts from their own payroll totals that are
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Anyway I paid for insurance I could never make a clam on due to again government rules. i owned the business so i could never make a claim! on a product i was required by the government to buy so something of no value.
just because the insurance companies and 3M were the enforcers it still all goes back
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You don't understand: big companies have money. The job of the government is to tax all the things. Europe has been far less shy about blatantly inventing reasons to take billions from companies.
Re:Plus another tax and bureaucracy (Score:5, Insightful)
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People who love the way Europe does things should live in Europe. People who love America should live here. Everyone becomes happy.
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And yet we still accept more immigrants per capita than anyone.
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More like a punish the poor and middle class tax really. Fuel taxes hurt the poorest of us the most. Had he only passed a tax that went after people making over 100k Euros and I'm sure you would hear almost nothing about it. Certainly not rioting.
Re:Plus another tax and bureaucracy (Score:5, Insightful)
The rich people will just find ways to avoid paying the tax, or move elsewhere.
Taxes mostly hurt and poor and middle classes.
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Apparently thinking that unelected bureaucracies are a bad idea means that Congress (or a state's legislature) is prohibited from making laws.
Question: In your mind, who should enforce these Congressionally passed laws if not "unelected bureaucrats"? Do we need to hold a vote for every beat-cop position in the state?
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The ISPs listed also want to be content providers.
So all businesses that are solely content providers are competitors.
So they want to tax their competitors, and have that tax money delivered directly to them.
Of course their competitors will just pass the tax along to the consumers, which is fine by the ISPs because the higher costs will drive more consumers to go for the cheaper content provided by the ISPs.
You remarked that this is "unbelievable." I disagree. This behavior is completely consistent with t
GOP give away to rural communities (Score:5, Insightful)
No more. Fund municipal broadband out of the General fund or tell the fuckers to fuck off. All this does is charge me $5 bucks a month (I pay for business class at home) for free money in AT&Ts hands.
Once again, we've got an election in 2 years. Show up at your primary and vote the fuckers out. Then show up at the general and put some real pro-consumer folks in. We had plenty of them in the primary in 2018 but so few showed up for the primary that most of these yahoo incumbents survived. Again, no more. Primary them and then vote in pro-worker and pro-consumer reps who refuse corporate PAC money.
Re:GOP give away to rural communities (Score:4, Insightful)
I don't, read my post, not just the subject (Score:4, Insightful)
Keep in mind I'm not necessarily blaming the Rural folks for falling for this crap. The big reason I want them to have internet is so they can stop watching cable and over air TV and get out of the propaganda bubble their in. I think it would be great for the country as a whole. Those communities have massive hospital shortages and problems with clean drinking water. The American left (think the Bernie wing of the Democratic party) wants to solve those problems, but they keep losing elections to rural voters (who, thanks to the Senate, Electoral college and gerrymandering have about 40x the voting power of a city voter) keep shooting down attempts to help them.
If we could somehow get the message to them about how much the GOP is screwing them over we could fix just about everything.
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Right, it's the local left-wing Democratic Party politicians who are the champions of putting politics and special deals for their buddies aside and just working on solving problems for people.
Never mind what they actually do, as evident in all the long time Democratic political strongholds like Detroit, Chicago, Baltimore, etc.
But hey, don't believe your lying eyes, we really just need to put them in charge of more communities and this time it'll be different, right?
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Never mind what they actually do, as evident in all the long time Democratic political strongholds like Detroit, Chicago, Baltimore, etc.
Which are so much worse than Wichita, Charlotte and Charleston?
Why not look at the horror dystopia of Portland, New York and Seattle?
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You mean like North Carolina, on it's third consecutive year of large budget surpluses? [taxfoundation.org]
You need to get out of your bubble more. [reason.com]
Also, I hate to break it to you, but California government has been controlled by Democrats [ballotpedia.org] for far longer than they've had an officially balanced budget. It's still not balanced if you actually account for public employee pension obligations in a reasonable manner: [ocregister.com]
They were doing alright (Score:2)
As for Chicago & Detroit: National problems (like the manufacturing base being outsourced or our disastrous healthcare system) can't be solved at the local level. Who knew?
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When you find a shred of evidence that actually happened, literally or figuratively, let us know. In the meantime, try to understand that an accusation is not equivalent to evidence.
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Re:GOP give away to rural communities (Score:5, Insightful)
It's not even a giveaway to rural communities, it's a give away to big telecom companies. There's already existing fees to pay for rural broadband. The telecom companies just take the grants and never end up building the stuff they promise and the government never calls them on it or forces them to return the funding.
True, but it'll be sold (Score:2)
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as give away to rural communities. A rural voter has somewhere around 40x the voting power of a city voter thanks to our Senate, Electoral College and Gerrymandering. We need to get those folks to stop falling for this crap and get on the side of the rest of the working class.
That's why equal representation is enshrined in our constitution. Not proportional representation. Equal representation.
"There's more of us, so they don't count" is not valuable to a political process.
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This is exactly it. I support rural broadband, but make the "i hate big gubmint" crowd pay for it themselves. If this gets passed, they'll be on broadband from Bumfuck, North Dakota yelling online about how the government wastes *their* money.
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The BDAC is an industry committee, it's not the FCC. It's organized by the FCC so the industry can make suggestions. It doesn't matter who is on the FCC, or even if this committee exists, the industry is going to suggest you tax other people to give them money, just like just about every other industry. Next someone will exclaim surprise that Tesla thinks we should increase the gas tax in order to subsidize EVs.
Where the rubber meets the road is if anyone actually goes along with their new tax proposal or n
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On the other hand ... (Score:5, Insightful)
Since "Internet-using" companies already pay their ISPs for access and bandwidth, like everyone else does, perhaps the ISPs could take some their -- what do you call them, ah, yes -- enormous profits and use them to build rural infrastructure all on their own. Sure, perhaps the ROI / profits from that won't be enough to list under the "Rape and Pillage" section of the quarterly reports, but maybe people will hate ISPs a little less -- except, obviously, for Comcast. :-)
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Making others pay their bills (Score:2)
perhaps the ISPs could take some their -- what do you call them, ah, yes -- enormous profits and use them to build rural infrastructure all on their own
They are. Not to the extent we want them to, but to a certain extent, they are. They just want someone else to foot the bill.
But if they get this way, I guarantee you that they will define "rural" as generously as possible (because they're already writing the rules), to maximize how much of this money they can spend on -existing- customers that they alread
How About... (Score:5, Interesting)
...we sue AT&T, Comcast, and Verizon for the $400 billion of public funding they already received for rural broadband and just pocketed and we can use that to provide rural broadband?
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we sue AT&T, Comcast, and Verizon for the $400 billion of public funding they already received for rural broadband and just pocketed
If the amount of money were even close to that level and the case for liability even close to that clear, any number of creative and enterprising class action lawyers would have swarmed over this a long time ago.
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I don't think a lawyer can just sue on behalf of the government. Cause it's the government that got screwed over, not the farmers. Or rather, the farmers got screwed, but they only violated the contract with the government.
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I don't think a lawyer can just sue on behalf of the government.
No, but a lawyer can sue on behalf of a bunch of farmers. That's the class action bit.
Cause it's the government that got screwed over, not the farmers. Or rather, the farmers got screwed, but they only violated the contract with the government.
If the ISPs violating the contract with the government screwed the farmers, that starts to sound an awful lot like the farmers were third-party beneficiaries under the contract. That could give them standing to sue.
Something has to pay (Score:2)
Let a monopoly telco return with a network they 100% control and demand a town/city accepts that monopoly network they pay for?
it's like giving the gas tax to private toll roads (Score:5, Insightful)
it's like giving the gas tax to private toll roads and no they will not be made into free roads.
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It's worse, it's like suggesting Walmart should pay road tax because how else are their customers going to get to the store.
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You're already paying the fuckers! (Score:5, Insightful)
ITFA motherfuckers (Score:4, Insightful)
They can't tax Internet use. It's literally against the law.
But don't let that stand in the way of FCC announcing to the country how totally, utterly and completely corrupt they are.
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You realize the FCC didn't vote on, nor participate in, nor announce any of this, right?
It's there in the summary, this is a suggestion to the States from the BDAC, an industry recommendation board.
Like pretty much all the other industries, they think we should tax or regulate other people, especially their competition, and give them the benefits.
The frequency with which they get their way is why we need to not grant these regulators the power to actually do it for them.
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You realize the FCC didn't vote on, nor participate in, nor announce any of this, right?
It's there in the summary, this is a suggestion to the States from the BDAC, an industry recommendation board.
I don't know how to parse the above in a way that can be made self-consistent. BDAC is committee created by the head of the FCC in his official capacity as such.
Specifically I don't understand:
Why don't the fruits of an FCC committee constitute FCC participation?
Why are public notices not announcements?
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Yes, the BDAC was organized by the FCC. There's your first clue that the FCC isn't the BDAC and the BDAC isn't the FCC. It's similar to how while the Presidency is created by the Constitution, the President isn't the Constitution and if the President says something, it's not the Constitution saying it.
The BDAC has no power, other than to make a recommendation, i.e. give their advice. [fcc.gov]
The FCC is a specific commission [fcc.gov] which has members who vote on things they're authorized to vote on by Congress. None of the c
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I also wonder if this means comcast stops charging extortion fees to service providers?
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I also wonder if this means comcast stops charging extortion fees to service providers?
They're so cute when they're naive, aren't they?
But net neutrality stopped you from investing.. (Score:4, Informative)
...in infrastructure projects like this one, right?
Well, you got net neutrality overturned. So go invest in that infrastructure now... Oh wait, you don't want to pay for it now. What's your lame-ass excuse now?
You lying, greedy, ******* bastards.
Fuck Ajit Pai... (Score:2)
Does it apply to AT&T ? (Score:2)
Apply to any business the benefits from broadband internet ? Does that apply to AT&T and Comcast as well as they are entirely dependent on the internet and broadband ?
No taxation without representation (Score:2)
Once you start Taxing things, it doesn't stop and it won't ever go away.
I seem to have heard this somewhere before:
No taxation without representation...
https://en.wikipedia.org/wiki/... [wikipedia.org]
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Rural Broadband (Score:2)
Note, they are calling mobile internet rural broadband now, some of the most expensive bandwidth to purchase as a consumer.
We want to tax businesses to pay the wireless providers for their already lucrative business.
Seems like businesses don't want the hassle of creating a successful business, but would rather get subsidies from those who put in the effort.
Ajitating (Score:2)
Learn how the fucking Internet works! (Score:2)
They pay for their own bandwith.
It's the customers on these networks that GENERATE the requests for traffic.
It's not like these services are simply broadcasting into these networks.
Fucking retarded.
Interesting (Score:2)
OK, show of hands ... (Score:2)
... who, like me, (retired IT guy, 73 years old) predicted back in the mid-late 80s that the government would tax the Internet?
Do we really need rural broadband? (Score:2)
How much of a kickback is Ajit Pai getting? (Score:2)
Zero chance any of this money ISPs will get from this is going to go to improving anything for consumers, in fact I expect they'll just claim they're 'improving' things, just so they have an excuse to jack
Remember... (Score:2)
People welfare: Bad
Corporate welfare. Good
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The word you want is 'penalty,' not tax, and those should have been baked into the language of those commitments if they are actually commitments and not just your standard marketing hot air.
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