Broadband Tax: Why I Am For It

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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Broadband Tax: Why I Am For It

Many in the VoIP industry are sick and tired of having to deal with every state wanting to tax, regulate, and/or kill VoIP. It is ridiculous. Really. I have long advocated taxing all broadband connections and not discriminating between what applications run on such pipes. Seriously, how could it be possible to tax VoIP only and not IM and e-mail? After all these forms of communications are equivalent. It is obvious that the old system of taxing telecom won't go with us into the VoIP world.

So when I read a CNET article titled Congress proposes tax on all Net, data connections, I smiled. I didn't smile because I enjoy paying tax but because perhaps once and for all we will have a way to for the government to recoup all the tax revenue they will lose due to VoIP. They are going to get it one way or another. There is no reason to even consider fighting it. So I embrace it. Bring on the broadband tax, then be done with it. Please don't try to tax every cool new application that comes down the pike. Once you tax broadband you are done, finished, it is over. Please include this in the bill so VCs don't have to worry three years from now that conferencing over IP is subject to a luxury tax.

I mention all of this because under consideration is taxing VoIP and specifically p2p networks like Skype. Within the article is a quote from James Maule who teaches tax law at Villanova University where he says that extreme taxation options make the less extreme options more palatable. Is taxing Skype calls extreme? I would label it as impossible. Most of the calls on the network are free. How do you tax something that is free anyway? Worse, how do you tax something that is free and no one can track? Does the FBI need to conduct phone audits to make sure we all pay our VoIP taxes?

If my suggestions are implemented, from his point onward entrepreneurs can spend their time innovating without the fear of the regulatory cloud that looms over the head of VoIP VCs and companies. Let's put an end to the fear of taxing everything in sight by taxing broadband only and not the applications that run over these pipes.

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