'Consumer' Group Wants Netflix To Tax Customers To Give To Telcos?

from the really? dept

Fri, Feb 25th 2011 8:25am — Mike Masnick

This one's a bit bizarre. We were just talking about the ridiculous boondoggle called the Universal Service Fund, which is one of those "taxes" on your phone bill that's supposed to go towards having the big telcos supply service to rural areas. Of course, since there's no oversight, it seems like most of the money just goes into the telcos coffers. There are all sorts of ways to deal with this, but one idea that makes no sense at all has been put forth by the Consumer Federation of America... who thinks that Netflix should be "taxed" to provide money for the USF. Why? Um, that's not clear. Basically CFA seems to think that big internet companies should now pay up just because:

"The Internet is not an infant industry anymore. It can certainly bear the burden of making sure that wires and the communications mediums are there."

So, really, what this "consumer" group is suggesting is that Netflix raise its prices on consumers, to give telcos more money that they just use to pay for operations, rather than actually investing in infrastructure for the disconnected. How does that possibly help "consumers"?

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Filed Under: broadband, consumers, tax, usf
Companies: consumer federation of america, netflix

32 Comments

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Marcus Carab (profile), 25 Feb 2011 @ 7:44am

FTA: He stressed, however, that the FCC must address the mechanisms for distributing the money � before it overhauls contributions. Tackling these questions simultaneously is a recipe for "political stalemate."

"If we have [the contribution] debate at the same time we're doing distribution, I absolutely guarantee they won't have it done by the end of the year," he said.

So they don't know what it's for, they don't know where it should come from, and they aren't prepared to put those two questions on the same table. Remind me again why this fund exists, FCC...
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Chronno S. Trigger (profile), 25 Feb 2011 @ 8:33am

Well, this is epically stupid
Taxing Netflix for the USF is like taxing my company for the USF because we use the phones for tech support and charge our clients for it. GE, Microsoft, HP, or Dell wouldn't go for it, why the hell should Netflix?

I'm assuming that the CFA won't just stop at Netflix. Why would they, Youtube still uses more bandwidth then Netflix. Then we have all the other video sharing sites, and then the music sharing sites, then the program sharing sites. Why don't we just tax them all and say to hell with the consumer. They'd all be happier living in boxes on the street anyways, right?
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:Lobo Santo (profile), 25 Feb 2011 @ 8:40am

Re: Well, this is epically stupid
[sarc] (In the voice of the elite)
Here's the way the world is supposed to work:
1% of us are super wealthy and we're supposed to get anything we want at essentially no cost because we're entitled to it and just plain better than you.

The rest of the schmucks on this planet better break their fucking backs 20 hours and day and 82.357% of every penny they earn makes it way to my pockets anyhow--not that I need it, it's simply that they do NOT need it.

Now you know, you my cease being ignorant.
[/sarc]

;-P
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Anonymous Coward, 25 Feb 2011 @ 8:40am

Similar sh!t in Canada:
http://thenextweb.com/ca/2011/02/18/netflix-may-get-slapped-with-fees-to-broadcast-in-canad a/
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Not an electronic Rodent, 25 Feb 2011 @ 8:49am

Am I missing something?
Are Netflix in some way exempt from the many other taxes the government levies on businesses?

Aren't Netflix a service providor not a business that has anything to do with "wires"?

If Netflix is just a service providor, doesn't that mean that iTunes, uTube etc would be equally liable for such a tax? Or are they already? What's special about NetFlix?
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:Lobo Santo (profile), 25 Feb 2011 @ 8:53am

Re: Am I missing something?
Netflix has money. Hence, they're a target.

So does Google--who owns YouTube so it's very likely if this BS slips thru they'll attempt to apply it there as well.
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Mike42 (profile), 25 Feb 2011 @ 9:07am

Re: Re: Well, this is epically stupid
Here's some infographics to help you with that:
http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
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Anonymous Coward, 25 Feb 2011 @ 9:08am

Re: Re: Well, this is epically stupid
I almost clicked funny, but it's sad, scary and true.
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A nonny mouse, 25 Feb 2011 @ 9:10am

A thought - is it just another version of the "waaah, they're making money on them internets! Pay us!" telco argument, only with the money going to "help the underserved" instead?
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Anonymous Coward, 25 Feb 2011 @ 9:18am

Netflix already pays into the USF
I do. Everyone with a phone bill pays into the USF.

Oh, wait that's not what they mean? They want the USF to not be a flat tax, but to be a broadband usage based tax?

That's all we need is for the IRS to suddenly be in charge of auditing our broadband usage (please retain records for three years please).
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PRMan, 25 Feb 2011 @ 9:22am

Re: Re: Re: Well, this is epically stupid
Wow. Great charts. They really put it into perspective. I had no idea it was that bad.
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Chronno S. Trigger (profile), 25 Feb 2011 @ 9:26am

Re: Re: Re: Well, this is epically stupid
Another reason for Dark Helmet's "Horrifying" button? (I can't remember if DH said that, or it was said in response to his comment)
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Martin, 25 Feb 2011 @ 9:29am

Can the Telcos and Cablecos use the misappropriated rural fee money to pay Netflix subscription for all of their customers?

Anyone would like to create Consumer Group for that purpose?
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The Infamous Joe (profile), 25 Feb 2011 @ 9:35am

Re: Re: Re: Re: Well, this is epically stupid
I had no idea it was that bad.

Yeah, if you're American, the fourth graph already told us that. :P
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Simon, 25 Feb 2011 @ 9:51am

Response?
Dear Telcos

Your customers are requesting an ever increasing amount of data from our servers. It is not cheap for us to run the hardware to fulfill these requests. Accordingly we will be requiring you to pay us a little extra cash to ensure your customers are served to a reasonable standard.

Thanks a lot, love Netflix.
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Havoc (profile), 25 Feb 2011 @ 10:23am

Cool!
I can fix this. Netflix is now a service, $8 per month. Change it to a membership fee, $96 per year, free streaming. Not a service, but a club.
Oh, and sue the FCC- for anything. It's 'Big Government', and that kind of thing will fly right now. We'll get Congressional panels and hearings and in the end, 5 years from now, it all just goes away because we've all forgotten.
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Anonymous Coward, 25 Feb 2011 @ 10:26am

Sounds like an astroturfing campaign . Telcos want to handicap Netflix so they can push their poorly designed wares.
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Jay (profile), 25 Feb 2011 @ 10:46am

Re:
Hasn't the CRTC pissed off Canadians enough?
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Mark Cooper, 25 Feb 2011 @ 11:18am

Let Him know...
I think everyone should let Mr Cooper know what we think is his "wonderful" , new idea.

Mark Cooper
Consumer Federation of America
mcooper@consumerfed.org
301-384-2204
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Ryan Diederich, 25 Feb 2011 @ 11:26am

What About Me
But what about me????!!? I use the internet, shouldnt I be taxed for using it?

What about my table? My laptop sits on the table and I use it for piracy. Shouldnt the table maker pay a tax to help fund anti-piracy efforts?

What about asshats? Should asshats be able to tax everything on the planet until they are satisfied?
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Dahovove, 25 Feb 2011 @ 1:34pm

Since you can access Netflix via the internet to view movies and tv shows this would be double taxation which I thought was illegal. You already pay this tax on your ISP bill. Please government take all my money and just tell me what I a can and can't have. Oh wait they are almost already doing that.
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The Infamous Joe (profile), 25 Feb 2011 @ 3:15pm

Re:
Do you pay income tax? Do you pay sales tax? Double tax!

It's worth noting that one can use Netflix with the US Postal Serviceand a dvd player. Why did they get picked for the tax? (versus Hulu, or youtube?)
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Anonymous Coward, 25 Feb 2011 @ 4:30pm

Goodbye good old USA
It's clear the only thing coming out of America is lawsuits and stifling of consumer and human rights. What a frigging joke of a country.
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Anonymous Coward, 25 Feb 2011 @ 6:19pm

Is it really fucking hard to understand that these "internet companies" pay for their internet bandwidth? Astroturfing ftw.
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Anonymous Coward, 25 Feb 2011 @ 7:02pm

USF
Having worked in a school district, I should mention that some of the funds from the USF goes to supporting the technology infrastructure in schools and libraries (servers, switches, routers, etc.).
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Anonymous Coward, 25 Feb 2011 @ 7:23pm

Re: Re: Am I missing something?
Well, Google has at least one thing for them, they are building their own physical network so they don't need to deal with that crap anymore, they even have transoceanic cables that they paid for.
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Shine (profile), 25 Oct 2011 @ 2:31am

taxes
Too much taxes! How can people cope?
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Andrew, 3 Dec 2011 @ 6:15am

Re: Re: Well, this is epically stupid
I totally agree with you.
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Joy, 25 Jan 2012 @ 8:23pm

The USF should be more transparent in how they are spending the funds generated.
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Andrea, 27 Feb 2012 @ 4:53am

Are you talking about University of South Florida ?
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Ann, 30 Mar 2012 @ 10:11am

USF is Universal Service Fund...I think they have this also in our electric bill.
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Florinda, 23 Apr 2012 @ 9:24pm

With taxes being raised on products or services, it's the consumers/users that get affected anyway since they usually will have to pay more now coz of tax increase.
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