On Thu, May 27, 2010 at 02:55:21AM -0700, MDK wrote:
> As long as there is money on the table - as long as any administration or
> agency or even Congress has the means to buy off resistance - there is no
> reliable massive block of resistance. As was pointed out in other emails,
> an alliance with small and rural CLEC's and others is going to be shaky,
> because if the regulators put money on the table for them, they abandon the
> "common defense" and we're on our own.
Yes, I expect USF money to be used as bait in how this plays out.
> Next, we need to address fundamental questions - Ideas must be sellable to
> Congress, they must obtain at least a modicum of support, and they should
> be equitable to all - putting free market principles to work. It must not
> institute permanent subsidy, which discourages the establishment of business
> models which are fundamentally sound WITHOUT public money.
I see no reason to have permanent USF subsidy. It is money down the toilet over
the long
run and a tax that seriously hinders people's ability to afford communications
services.
A big part of current USF money goes to "switching" which I see as an
antiquated
hierarchy where small rural towns have their own switch, with all it's
maintenance and
support. With the advent of cheap high capacity fiber created by ARRA projects
and
private upgrades, smaller digital switches, wholesale access to switch
partitions, and
VOIP, there is no technical reason to permanently subsidize modern distributed
switching. If permanent support for "switching" were tapered off, the rural
phone
companies could find cheaper ways to do voice switching. The cellcos almost all
have
some sort of architecture where all their sites in the state go back to single
state-wide switches. When not used for switching, permanent USF pays for
monopoly
infrastructure that discourages rural competition by irrationally priced
services.
> 4. No ILEC is ever eligible for any subsidy within the boundaries of it's
> incumbency, whether it is expanding broadband to unserved portions of its
> incumbency or not. Whether or not CLEC status should be included should
> be a subject of debate.
CLECs tend to be doing stuff that meets a need the ILECs aren't filling. I'm
fine with
non-permanent support to that.
> 5. That any financial incentive consist solely as a refundable tax rebate
> per consumer serviced per month, with the consumers being defined as those
> who reside in an area currently without broadband, or in an area where
> infrastructure does not currently exist to serve at least 95% of all
> residences within that area. Area definition should be tied to local
> trade areas. Consumers would be defined as customers of the ISP, be it
> residential, business, or organization - like schools, businesses, or even
> other ISP's.
> 6. Rebate eligibility expires upon: 2 years after a 3rd provider or 2nd
> "different" technology covers at least 95% of all consumers within the
> defined areas. ( example, DSL access is limited to a smallish rural
> area, so the 1st and 2nd WISP can both claim rebates per consumer, but the
> DSL provider cannot unless it expands to reach 95% of the people. WISP's
> cannot qualify EITHER, unless or until they can cover 95%. Even if 2
> WISP's fully cover, rebates continue until a third joins - then the
> trigger allows that WISP subsidy for 2 years,, or the telco rolls out
> universal DSL, at which the telco and WISP's continue for 2 years and then
> expires. Even if one/any/all go out of business after this threshold is
> crossed, the expiration is permanent,)
A tax rebate would be highly preferable to USF, as it would be a reduction in
taxation
rather than an increase in taxation. Either way, non-permanent support is the
only thing
I can advocate.
I like the idea of non-permanent support for unserved/underserved areas. My
state's
ConnectME fund is looking at a one-time ISP payment (per customer) to support
high-cost
installations to unserved locations. The details of how much and under what
conditions
are undecided, but it would address the high CPE/installation costs that plague
broadband expansion and would not cause long term dependence on government.
This would
be an alternative to the present system of government funded infrastructure
projects.
This would be less apt to stir a hornets nest of capitalism versus government
funded
project overbuilding, which is more and more apt to happen.
> 10. That ALL infrastructure investment be fully expensable -as in 100%
> write-off in year one, as it concerns taxes. Basically, that puts every
> ISP in the position of being able to write off and not be taxed on growing
> or expansion. This should be permanent tax policy for EVERYONE,
> everywhere.
This has some precedent. Something like the ยง179 which lets the self employed
fully
deduct big SUVs and work trucks. This was meant to help small businesses and
the auto
industry. The left has whined about this promoting SUV production, but nobody
can whine
about better Internet coverage and choice.
This would also allow me to claim the remainder of deductions for past
infrastructure
purchases until they are fully depreciated. This means I'd have a temporary tax
break
meant to fuel growth while slowly transitioning fully to a more agile 1-year
depreciation scheme. It would not be a tax break that would hurt the government
though,
as the quantities of taxation are not actually changing.
--
/*
Jason Philbrook | Midcoast Internet Solutions - Wireless and DSL
KB1IOJ | Broadband Internet Access, Dialup, and Hosting
http://f64.nu/ | for Midcoast Maine http://www.midcoast.com/
*/
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