More opinion on USF
Ken Sutton (kensut@crlc.org)
Thu, 11 Dec 1997 09:12:46 -0500
Date: Thu, 11 Dec 1997 09:12:46 -0500
Message-Id: <v03110703b0b5a0163b28@[209.66.136.44]>
From: Ken Sutton <kensut@crlc.org>
To: Multiple recipients of list <conntech>
Subject: More opinion on USF
<BENTON-COMPOLICY@CDINET.COM>
From: Kevin Taglang <kevint@BENTON.ORG>
Subject: The Boy Who Cried "Tax"
Comments: To: upforgrabs-l@CDINET.COM
To: BENTON-COMPOLICY@CDINET.COM
James K. Glassman is the boy who cried "tax" ["A New Tax for the New Year,"
Washington Post op-ed, Dec. 2] when he saw the commitment to universal
service for homes, schools and libraries. The Wall Street Journal fell
into line with much the same argument in its editorial "New Phone Tax"
[Dec. 9], and I suspect we will see these same tactics rolled out in local
papers across the country.
What Glassman and the Journal ignore is that first, the cost of universal
service is about 2% of 1996 telco industry revenues, a proportion that is
only expected to shrink. Second, passing these costs onto consumers is a
choice made by the companies as they consider their market position and
competitive pressures, just as they consider competitive pressures when
they decide whether or not to raise rates if they face higher labor costs,
equipment upgrades, or the costs of expanded lobbying and issue ads.
Third, charging consumers for regulatory changes that are supposed to
benefit the companies is a getting to be a pattern: last year the
Washington Post reported that local telcos were filing plans to raise
residential rates $120 a year in order to get ready for competition.
But here's the most basic reason these cries ring a false alarm: these
funds don't disappear into the general treasury -- they go to reimburse
those telephone companies for the full market price of providing service to
hard to serve homes, as well as schools and libraries. Will the same
companies that put new charges on our bills give us reductions when they
draw that money out of the universal service fund?
Is it all worth it? Consider the cost of doing nothing. Want to save the
$2.2 billion on rural subsidies? Listen to the cries from rural residents
(and their Senators) when they see their phone bills rise an estimated 200%
to 300%. Many may discontinue their phone service, resulting in unused
(read: not revenue generating) telephone lines -- the cost for which
telephone companies will hide in your telephone bill. Want to save the
$2.25 billion to reduce telecommunications costs for schools and libraries?
Sure, let them pay top dollar for phone and Internet connections -- that
tab will be paid for by local taxpayers anyway. In the end, where's the
savings?
The red-baiting of the 90's is to cry "tax." Americans know better. In
research Benton conducted a few years ago, we found that Americans
overwhelmingly support programs to ensure connections to schools,
libraries, and hospitals (77% supported vs. 18% opposed) and that 76% of
Americans agreed that
"Government should require companies that profit from the new technologies
to dedicate a part of their resources to supporting community uses and
community access to government information."
The Act, with its explicit commitment to universal service and its clear
language about wiring classrooms and libraries, reflects a hard-won
compromise among companies from many sectors, public interest groups, and
policy makers. The only thing that deserves the epithet of "taxed" is the
logic of those who would shut down the effort to connect schools and
libraries -- especially those serving America's poorest children -- by
misrepresenting the programs created to meet Congressional goals.
-Andrew Blau
Kenneth Sutton
Office Manager & Technology Coordiantor
Capitol Region Library Council
599 Matianuck Avenue
Windsor CT 06095
Voice: 860-298-5319 ext 3001
FAX: 860-298-5328