FCC Rural Phone Subsidies Reach As High As $3,000 Per Line 372
jfruh writes "The FCC's Universal Service Fund has a noble goal: using a small fee on all U.S. landlines to subsidize universal phone coverage throughout the country. But a recent report reveals that this early 20th centuryy program's design is wildly at odds with 21st century realities: Its main effect now is that poor people living in urban areas are subsidizing rich people living in the country. The FCC says that it's already enacted reforms to combat some of the worst abuses in the report — like subsidies to rural areas that add up to $24,000 per line — but even the $3,000 per line cap now in place seems absurd."
Re:The urban poor subsidized the rich for a while (Score:4, Informative)
It's rural areas being a drain on the nation's resources. They're anti-tax but demand huge government spending, just for them.
Re:The urban poor subsidized the rich for a while (Score:1, Informative)
OK, you can keep your broadband. Us country folk will keep all the lumber, minerals, and produce.
Re:The urban poor subsidized the rich for a while (Score:0, Informative)
OK, you can keep your broadband. Us country folk will keep all the lumber, minerals, and produce.
We'll also keep the oil, natural gas, and energy produced from Wind & Solar Farms....because NONE of that exists in the city.
Re:Education (Score:5, Informative)
I grew up in a fairly rural area. It's sort of like an onion.
At the very center of the cities are poor people, there's middle class urban dwellers surrounding them with a few high-wealth neighborhoods. Around them are poor people that live on the edge of the city. Around them are the middle-class suburbs. Further out are some higher wealth suburbs. Once you get past the suburbs, more poor people. Get out to the small villages and there's some middle and lower-middle class. Rural areas near these small villages have a healthy mix of wealthy and middle class. But you get way out there in bumfuck and it's all dirt poor people. Of course, there's exceptions at every level. There's going to be eccentric millionaires who want to live way out in the boonies, but they're largely outnumbered by the people living in shacks (and yes, America still has plenty of people living in shacks in the woods).
Who really funded this study? (Score:5, Informative)
I really wish that the press releases of shadowy "think tanks" (and consulting firms, for that matter) were treated with a little less credulity and more scrutiny. This study was published by a group calling itself the "Alliance for Generational Equity". Who are these people and who do they represent? We don't know. I did some Googling to see if I could find out more about them, but didn't find much. No Wikipedia article, nothing on SourceWatch. Nothing about their funding sources appears to be public. How do we know this "think tank" isn't just another sockpuppet of the Koch Brothers?
I was able to find some information about Thomas Hazlett, one of the authors whose name is on the study. He's a professor at the GMU Law School, which is not an encouraging sign (that law school is a notorious den of right-wing crackpots). Hazlett is also against net neutrality [youtube.com]. This man is not on your side; he's a shill for rich plutocrats. Listen to anything he has to say at your peril.
Re:Please explain... (Score:5, Informative)
1. When having a phone became a 'right'
It became a right when having a phone was a necessary step in getting a job, something we consider fundamentally necessary to taking part in modern society.
2. Why people have to have phone that requires 90% or more of the country to pay for it because of where they choose to live
Cart before horse problem. Their families lived there, then phones became necessary.
3. Why I should pay more because someone wants to live in a rural area where they can't make any money and don't have phone service. And where storms can bring down phone lines causing thousands of dollars in repair costs for a phone they don't pay for.
The same reason you pay more so someone else doesn't get robbed or shot. Enlightened self interest isn't a complex idea.
4. Why they can't move
Why don't you move to where they are to lower the cost per person of the line? Oh now moving is a huge onus to place on someone?
5. Why, after all of the above, if they don't have skills, can't live off the land, can't get a job, can't move, and are poor, we don't relocate them someplace else since they must already be living on the government dole. When you don't make your own way and don't contribute to society, you don't get to decide the rules that govern how you receive free money and other things.
Because they actually earn more than they cost, as part of a complex interconnected society, and their location may be important to maintaining the support network for the country's agricultural base? Who knows? You're criticizing totally anonymous people we don't even remotely know individually, which turns out to be easy.
Re:Please explain... (Score:4, Informative)
1. It's part of the national infrastructure, just like roads and electricity and the USPS (although that one is becoming a bit outdated). The more widespread communication is, the better the country as a whole becomes.
2. This is the same argument used against... everything. The country works because the masses subsidizes the niches. I'm sure you use plenty of things that are subsidized by people that don't use them. Got kids in a public school? Landowners subsidize that even if they don't have kids. Drive on a public road? People who don't own cars subsidize that. The list goes on.
3. People can't make money in rural areas? Apparently you have no concept of telecommuting, farming, logging, etc. As for the rest of 3, refer to 1.
4. Why don't you move? You're likely not living in the most efficient place possible either. Also, moving can be damned expensive. Personally, I live where I do because I enjoy the area
5. If you actually read the summary, you'd realize they're talking about rich people in the country being subsidized by poor people in the city. Maybe you should move to somewhere with better literacy rates, it might rub off on you. But hey, it explains your signature.
Re:Rural Rich? Bullshit. (Score:5, Informative)
So earnings are 25% higher but cost of living is 50% lower.
First, no, it's not 50% lower. Land and homes are cheaper, but they are not the majority of your cost of living. Electricity, food, and consumer goods are much closer to parity price (though retail markup is higher in the city, of course). Gas is very close to parity, and you have to use more of it because everything is further away. There's no public transit, and people in the country lose efficiencies of scale in police, fire, and education services. So sure, there's an effect from cost of living, but it is nothing like 50%. I gave you numbers in my post -- you want to counter it with some ridiculous claim, you show me something to back it up or you're just a blowhard.
And even if it is big enough to balance the 25% difference in income, that still doesn't make rural folks rich. That term being wielded by a lobby to describe people making $32k in the US is pure bullshit regardless of the relative cost of living.
Re:The urban poor subsidized the rich for a while (Score:5, Informative)
As a % of income, rich people pay maybe 1% sales tax, while poor people pay 5-10% sales tax or more.
% of income is a worthless metric. If your income is 95% spent on subsistence, even a 2% tax is onerous. If your income is spent 5% on subsistence and 95% on savings and non-essential expenses, even a 20% tax may not be onerous (except emotionally).
I hope no one needs help in figuring out which of the above are rich and which are poor.
Waste fraud and abuse offend everybody (Score:4, Informative)
But... reading the paper I smelled a preconceived agenda. The paper was sponsored by Americans for Generational Equity an ostensibly bipartisan group concerned with the fact that the "Pig in the Python" is getting closer to the snake's cloaca. And the group worries that said meal is (or soon will) be providing less nourishment than it takes to digest it. Read: The Boomers are greying and will suck the life out of the country before they become python excrement. Think of the children.
A look at the group's composition [nndb.com] reveals a majority of Republican notables with a sprinkle of moderate Democrats. The FCC is a bipartisan body and fairly judicious by nature IMHO. I have to wonder what is really going on here. There are hundreds of more fruitful places to look fo WF&A. As for real waste? Check out the US military. [washingtonpost.com]
Re:The urban poor subsidized the rich for a while (Score:3, Informative)
You know, I can't take responsibility for people who are foolish enough to play the lottery with their last dollar. That's not a tax, unless you want to consider it a tax on stupidity. Stop being stupid, and the tax is no longer levied. The PA lottery sends proceeds to programs for seniors, so if you proposed to eliminate it you'd be accused of ageism anyway. Government is the problem.
Guess who keeps raising the taxes on alcohol and tobacco? What was the first tax Obama raised when he came into office? Government is the problem.
Claiming that renters (there are renters outside the city, BTW) are paying property tax is also as dumb as claiming that when I take out a loan or use a credit card, I'm paying the bank's taxes. Again, if property taxes are too high and forcing up rents, guess whose fault that is again?
There is a cap on the SS tax because there's a cap on benefits. But I don't expect the Slashdot leftist to believe in fairness as much as the "fair share".
Re: The urban poor subsidized the rich for a while (Score:5, Informative)
"Capital gains" are taxed differently than "income". This leads to a situation where our tax policy ends up being quite regressive, in that the wealthy are paying lower tax rates than the poor. If this is truly what we want as a society, we should campaign to have the "income" tax brackets reflect this. However, I don't think you'd have much popular support for a policy that takes the tax brackets and flips them around so that the rate goes down as income goes up. That means that our tax policy is not only regressive, but it's also sufficiently misleading to have won the support of the electorate despite being against their own interests.
I'm not sure where you got the idea that investments are "evil". GP was merely stating that money that is invested is not spent, and therefore is not impacted by a sales tax. This is only "evil" if you believe that it is a moral imperative to pay sales tax. Reading comprehension FTW.
Laying cable in rural areas isn't cheap (Score:5, Informative)
Start doing studies. It is simply not that expensive to run and maintain cable, not even in rural areas.
Where I live (semi-rural outskirts of a major metro) the labor to string cable costs $1/foot and burying cable costs $8/foot. (source is a comcast field engineer) My nearest neighbor lives 600 feet away and the length of the line between my house and then next one is about 1200 linear feet due to how the line is routed. For someone on a farm this could easily be 3000+ linear feet. So there is your $3000 right there without even getting into the cost of the wire itself, the switchgear, signal boosters, customer service, engineering and the rest.
Now I have no idea if the subsidies provided are appropriate to the actual cost but it is genuinely expensive to run cable to rural locations.
Who the fuck is Alliance for Generational Equity? (Score:5, Informative)
And who's paying them ~$100,000 a year?
http://www.guidestar.org/organizations/26-2171390/alliance-generational-equity.aspx [guidestar.org]
Their web site www.truslseniors.org is down
Another question is, who the fuck is C. McClain Haddow, the guy who's running Alliance for Generational Equity?
http://reporting.sunlightfoundation.com/lobbying/client/alliance-for-generational-equity [sunlightfoundation.com]
Mother Jones has a hint.
The Artful Codger
Trashing the AARP with Grandma Green.
By Michael Scherer
July/August 2005 Issue
http://www.motherjones.com/politics/2005/07/artful-codger [motherjones.com]
The real pedigree of the group Green represents is hidden under layers of PR and politics. The Seniors Coalition was cofounded in 1989 by conservative activist Dan C. Alexander Jr., three years after he was sent to prison for arranging construction kickbacks as an Alabama school-committee member. Today, its top outside lobbyist is C. McClain Haddow, a former Health and Human Services official who spent time in prison with Alexander for failing to file a timely ethics waiver when he gave his wife a government contract. Haddow has also lobbied for generic-drugs manufacturer Mylan Pharmaceuticals.
The organization’s Washington activities regularly blur the needs of seniors with the agendas of corporate donors. After it took money from Microsoft in 1999, the coalition lobbied on antitrust litigation, and after it took money from Lottery.com in 2000, it lobbied on a bill that would restrict Internet gambling. Money also poured in from the American Petroleum Institute and the American Public Power Association—just as the coalition spoke out against the Kyoto Protocol and lower gas-mileage standards.
The Seniors Coalition is especially tied to the drug industry. PHRMA, the pharmaceutical industry’s trade group, gave the organization $2.2 million between 1999 and 2000 (the only two years for which full financial disclosure is available). Other drug industry sources funneled the group an additional $300,000 during that time. But Tom Moore, the coalition’s chief operating officer, writes in an email that only 22 percent of his organization’s funding comes from industry, and that the group “retains its complete independence in developing [its] legislative agenda.”
http://en.wikipedia.org/wiki/Astroturfing [wikipedia.org]
There is some interest group behind this that is going to save a lot of money if they eliminated the Universal Service Fund (which has its pros and cons), and this outfit is crying crocodile tears over the urban poor. Or generational equity. I'd take them more seriously if they were up front with their real agenda.
Re:The urban poor subsidized the rich for a while (Score:4, Informative)
Especially since they get 83% of their first 20,000 too.
Re: The urban poor subsidized the rich for a while (Score:5, Informative)
For a company's worth to increase, someone must've given them money. They must've earned that money to begin with. The money was taxed then as well. The money is taxed not twice, not three times, but continuously.
And that's not a problem. The problem is when a person (corporate or corporeal) is taxed twice.
The corporation is taxed on net income. The corporation is taxed once.
Stockholders are taxed for any dividend they receive from the corporation. They are taxed once as well.
If stockholders choose to sell stock (sell more than they buy), then any gains are taxed there. Once.
Going by your logic, the money is being taxed infinitely many times. First at the corporate rate, then at the capital gains rate, then at the sales tax rate (when investors spend it), then again at the corporate rate (when corporations make profits), forever, as long as it keeps circulating. While this is true, it's far from insightful. Nobody cares when "money" is taxed, they only care when they themselves are taxed.