Wi-Fi Tax?

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?

Topic: Wi-Fi

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  • Money is not the object...

    ...It's the excuse. This is an underhanded attempt by the Baby Bells and cell phone companies to stop a "free" wireless network by lobbying the government to attach fees to "free" spectrum, which would dierctly compete. Now, keep in mind that if this applies to anything in unlicensed spectrum, it would also tax all cordless phones, and if you want to take it that far, microwave ovens (as they produce radio waves in an unlicensed part of the sprectrum). This looks to me like a badly written piece of lobbyist legislation, being earmarked into the budget - which is so complex that almost nobody reads the whole thing (including the Congresscritters that pass the thing). You might want to take this from a "wi-fi" fight to a "Tax on all cordless phones!" fight. It's makes better press, and would make it easier to understand for our eleceted officials.
    • But maybe it is

      http://news.yahoo.com/s/nm/bush_budget_wireless_dc -- The budget calls for $25 billion to be raised in spectrum license fees over the next decade.

      In other words, the radio spectrum is there to be milked for money.

      I think that puts the WiFi fee proposal into perspective.
  • No surprise

    Government is now it's own self-serving entity.

    They do not own the spectrum but that won't stop them from exacting whatever "fees" they decide to impose.
    Tim Patterson
  • How Does it Make Everyone Else Feel?

    ...that is the question. How many of us work of the very invenstors, board of directors, corporate leaders that encourage this behavior from the Bush? We are glad to collect our large, but dwindling paychecks, watch our jobs go oversees (continued loss of jobs and dwindling money going into Social Security). We grumble in private. We just know everything will work out all right for us, because we are in "High-Tech". This current political and corporate leadership will kill off the current poor and we are future poor. How does that have to do with a Wifi tax? The Wifi tax is just the tip of the iceberg: below the beautiful facade is an ugly danger about to rip a huge hole in the lives and pockets of everyone except the top 10% elite. The signs are all around us. People need to start taking risks and speaking out. Our jobs and lives are not secure, so we might as well start speaking our minds in the workplace.
    • That's political bait...

      Economically, a society can't survive if 90% are poor and 10% are rich.

      The history of Latin America proves this without doubt. The brief history of African independence proves it as well.

      The privileges of the wealthy depend on having a large, stable middle class below them.
      • And we *will* find out

        Because it's headed there. All economic systems eventually skew to the rich. They have the leverage.
    • Umm

      Bush doesn't WRITE legislation (can he write?).
      Roger Ramjet
  • Taxable microwave ovens

    Since microwave ovens operate in the 2.4 GHz spectrum, I guess the Bush administration is going to tax them also...
  • Are you sure the telecoms aren't behind it?

    I mean, it's a threat to them, isn't it?
  • Cell phone

    Cell phones already have enough taxes as it is. Through Cingular, I have to pay $94/month to get 2 cell phones, on 2 lines, one phone having unlimited data transfer ($19.99 itself), and 500 minutes. I think it's obsurd that they are getting that much money as it is, and the last thing we need is another tax on top of the $9 or so goverment taxes on that $94 bill.
    Anthony S.