[12693] in Commercialization & Privatization of the Internet
Re: EFF and the big bad T (tax) word [long]
daemon@ATHENA.MIT.EDU (Bruce Fancher)
Thu May 26 11:32:15 1994
From: bruce@phantom.com (Bruce Fancher)
To: djw@eff.org (Daniel J. Weitzner)
Date: Wed, 25 May 1994 21:28:46 -0400 (EDT)
Cc: com-priv@psi.com, alt-politics-datahighway@cs.utexas.edu,
frezza@radiomail.net, don.wills@swc.com, digital@phantom.com,
freedom@phantom.com
In-Reply-To: <199405251745.NAA15467@eff.org> from "Daniel J. Weitzner" at May 25, 94 01:45:24 pm
Someone who disagrees with the EFF and/or opposes the redistribution of
wealth and resources = Extreme right-wing red-baiter. Uh huh.
Competition and free markets work. Government intervention doesn't.
The End.
[Daniel J. Weitzner] has written:
|
| Frezza is at it again, flooding the net with his extreme right wing
| diatribes. He uses the term "tax" the same way that the word "communist"
| was used in the 50s during the red scares. Well, EFF has been "tax-baited"
| by someone who disagrees with our politics in the same way as HUAC used the
| epithet Communist to discredit political opponents.
|
| EFF has never directly called for an "information tax," in Frezza's words,
| but everyone should be aware that we have supported two kinds of public
| support for net/information access, which, certainly could be characterized
| as taxes. They are these:
|
| 1. Universal services in the current telephone rate structure: In the
| current telephone rate structure there are many internal funding flows from
| certain classes of users to others. For example, it costs more to provide
| telephone service to some users than to other, either because of distance
| or population densities. We implicitly support this kind of rate structure
| in the current monopoly residential phone market. We explicitly rely on
| this kind of pricing to keep single user access to the Internet, other
| information services/networks, and ISDN affordable.
|
| There are those who would argue that this internal cross-subsidy is a form
| of tax inasmuch as it forces some users to pay more than they might for a
| service and directs that money to the "socialistic" end of providing
| affordable service for all. I don't think that there is anything wrong
| with taxing for important social purposes. But if you don't like the T
| word, then you can look at these funding flows as rational choices about
| how to distribute the common costs of keeping a national network of
| networks in operation. A network that only serves a limited part of the
| population is useless, therefore it makes sense to price it so that
| everyone (almost) can be online.
|
| What will happen to this subsidy source in the future, as monopoly phone
| services become more competitive? In the ideal world, competitive pressure
| will force prices down to the point that less support is needed in order to
| keep services affordable. But, it is unlikely that this will happen all of
| a sudden, and quite poossible that many areas will not experience the
| benefits of competition for some time. Until and unless the market works
| perfectly, some form of subsidy (whether internal or external) will be
| required. The precise choice of mechanism will depend on what the market
| structure looks like, and EFF is not in a position to predict that. We
| will have to deal with that over time as actual competition evolves.
|
| 2. Direct subsidy to end users: EFF has supported direct goverment support
| to subsidize network access for libraries, schools, and other public
| institutions, where those institutions could not otherwise afford to be
| online. We first made these arguments during congressional debates about
| internet commercialization, and still, as far as I know, support this
| notion. In 1992, when internet commercialization was still a relatively
| unknown quantity, we predicted that market forces would go a long way
| toward lowering prices and increases access, but that some institutions
| might still need direct support. At the time, the monopoly internet
| provider (ANS/Merit) and its supporters argued that if you opened the
| internet market to competition, then many public institutions would never
| be able to afford net access. As an alternative, EFF favored direct
| support as a way to enable users to purchase service on the competitive
| market, and because we recognized that some institutions would just never
| have the resources to purchase access to the net.
|
| All of these issues have been previously addressed in our written policy
| statements, and in previous postings to this and other groups.
|
| For those who are interested, I repost this initial reply to EFF critics on
| this issue from just a few weeks ago:
|
| [Reposted from May 2, 1994]
|
| For the last few weeks, disputes have been raging about EFF's Open
| Platform position. I regret that I have not been able to participate more
| actively in these discussions, but I do want to add a clarifying word or
| two here.
|
| Frezza seems to suggest that any and all regulation is, of
| necessity, a bad thing. His test for wise telecommunications policy is:
| "less is more." If you believe that anything government does can come to
| nothing but evil, then this is probably a good maxim. In fact, if your
| political beliefs run in this direction, then you'll probably be
| disappointed with most of what EFF does in the policy realm.
|
| Stahlman has accused of being Bell Company running dogs by
| including broadband services in our policy discussion and by allegedly
| dropping our initial support for widespread deployment of ISDN. Since he
| believes that mass-market access to interactive, high capacity transport
| services is a myth for all time, he believes that we've bought into a lot
| of misguided rhetoric.
|
| These comments are specifically in response to some of the concerns that
| Bill Frezza and Mark Stahlman have raised:
|
| What if Stahlman and Frezza were around when the Communications Act
| of 1934 was debated? That law guarantees all of us access to affordable
| telephone service. Frezza would probably have railed against the
| "entitlements program" being created, claiming that we should just let the
| market take care of providing phone service to rural areas and
| hard-to-serve regions. Stahlman would have mandated for time immemorial
| crank-up phones with multiparty line access only, on the theory that this
| whole "telephone age" was just a bunch of hype.
|
| The Electronic Frontier Foundation (EFF) believes that markets do a
| great job of generating technological innovations. However, sometimes
| markets fail to distribute goods equitably around the country. Where the
| "good", in this case communication, is essential to democracy, we believe
| that government has a role to ensure that universal access to basic
| communication service is available.
|
| For the last two years, EFF has been at the forefront of crafting
| policies that promote an open, accessible information infrastructure. To
| correct Stahlman's erroneous assertions, we have not given up on ISDN. To
| the contrary, EFF has succeeded in having legislative provisions designed
| to encourage near-term deployment of Open Platform services (including but
| not limited to ISDN) included in major telecommunications legislation now
| working its way through Congress. We have also worked for affordable ISDN
| tariffs in a number of states. Switched, digital services are an important
| first step in providing access to an increasingly high-capacity information
| infrastructure.
|
| EFF believes that there is a need to gradually upgrade the
| definition of universal services, so that if and when people come to depend
| on multimedia information access for important economic and political
| activities, that no one will be denied access to such services solely
| because they can't afford the cost of transport. I should emphasize that
| this redefinition of universal services is and should be an incremental
| process. No one is going to wave a magic wand (or Federal Register) and
| declare that there should be immediate switched broadband access to every
| home. Rather, as people come to use advanced services more and more, we
| should look at policy mechanisms to keep this service affordable and
| accessible. Market forces will hopefully play a role in keeping prices low
| and quality high, but we should not be so naive as to expect that the
| market alone will meet all needs.
|
| This kind of regulation is not a matter of charity to poor, but
| serves to ensure that we have a seamless national communications system.
|
| Ironically, in light of Frezza's sharp critique of
| EFF-as-welfare-statist, we believe that the Open Platform proposal is
| critical for promoting the emergence of a free, open market in new digital
| information services. Our support for ISDN began and continues because of
| the realization that this switched digital technology can be the basis for
| many new, innovative services, but that most telephone companies (the only
| ones able to provide this service) were failing to deploy it or price it
| affordably. This is the kind of regulation that even a free-marketeer
| ought to love: it creates that platform for a free market.
|
| In the end, I doubt that Frezza or Stahlman want to live in a
| totally deregulated communications environment. Frezza relies on
| orderliness in the airwaves so that messages he sends out via RadioMail
| arrive without interference from other services. Federal regulation
| maintains this order. Stahlman has nationwide access to MCI Mail because
| of a ubiquitous, affordable telephone network, another result of government
| regulation.
|
| In closing I want to stress that comments made by Stahlman and
| others on these lists have been of real help to EFF's internal policymaking
| process, just as I hope that they are informative for others on the net.
| EFF makes no promises shape our policies for every political stripe of the
| online world, but we will do our best to listen and engage in active
| dialogue about these issues.
|
|
| **************************************************************************
| "Only in a police state is the job of a policeman easy."
| --Orson Welles
|
| ......................................................................
| Daniel J. Weitzner, Deputy Policy Director <djw@eff.org>
| Electronic Frontier Foundation 202-347-5400 (v)
| 1001 G St, NW Suite 950 East 202-393-5509 (f)
| Washington, DC 20001
|
| *** Join EFF!!! Send mail to membership@eff.org for information ***
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