Wi-Fi Tax?

Summary:Sounds to me they're saying that your cost for using unlicensed spectrum should be based on what frequency hoarders pay in federal auctions. It also sounds to me like it's saying the frequency spectrum is government property that should be used to raise money.

CORRECTION: Harold Feld of Wetmachine says reporters who originally wrote there's a WiFi tax in the budget were wrong. The section of the budget in question is actually referring to a variety of frequencies which were originally given away, including the initial cellular spectrum, the DBS spectrum, and industrial users.

The original report has also been "clarified."

He adds:

This proposal has even LESS of a chance of passing than the previous one that only targeted broadcasters, although it makes more sense. A lot of people use licenses they didn't acquire at auction. This includes cell phone companies (the telcos all received FREE cellular licenses back in the mid-1980s when the FCC started the service, and distributed most of the initial licenses by free lottery), industrial satellite, all industrial users, a bunch of satellite folks (both DBS (which got a bunch of licenses free as well as a bunch at auction) and other forms of satellite communication). So the President's estimates that “fee collections will begin in 2007 and will amount to $3.6 Billion over the first ten years” should be treated with the same seriousness as “the Administration will develop the technology to transform toxic sludge into gold.”

But even in the version proposed by the President, THERE IS NO WIFI TAX. This is why people are having such a hard time figuring out how it would be collected, since IT WOULDN'T BE COLLECTED.

I deeply regret passing on this error.

Don't tax you, don't tax me, tax that man behind the tree.

Congratulations. If you use WiFi or any other 802.11 gear, you're behind the tree. Which means the Bush Administration has put you behind the eight-ball.

Hidden deep beneath the nearly $2.8 trillion spending document is a proposal to raise $3.6 billion over the next decade by imposing "user fees" on users of "unlicensed spectrum."

The reasoning used by the Administration, namely the growing federal deficit, starts to sound a bit hollow when you see that the budget sees an expanded deficit (even with the tax) and that it also calls for expanding tax cuts for investors.

Moreover it's unclear to me how such a tax would be collected. The most likely scenario would be for it to be imposed on all equipment using the WiFi spectrum, at the point of purchase, so your next router would cost $10-20 more, as would your garage door opener.

Or they could just force free WiFi hotspots to impose fees, and collect them from coffee shops.

There's also this bit of reasoning in the budget document:

"Spectrum assignment policy has not kept pace with the changing market. Service providers using different technologies to deliver a similar product can face different spectrum license acquisition costs. The lack of parity in spectrum assignment creates incentives that can diminish the overall utility of the spectrum."

Sounds to me they're saying that your cost for using unlicensed spectrum should be based on what frequency hoarders pay in federal auctions. It also sounds to me like it's saying the frequency spectrum is government property that should be used to raise money.

How does that make you feel? Should open source spectrum carry a price tag?

Topics: Wi-Fi

About

Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994.

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