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:FCC (Score:5, Insightful)
Re:The urban poor subsidized the rich for a while (Score:5, Insightful)
"That's not unique to phones. It also applies to highways, minor airports, housing tax incentives, and a number of other "American Dream" elements that really have nothing to do with having a successful society."
So it's not socialism? Damn!
Government math (Score:2, Insightful)
Much like other government regulations, these subsidies were written with certain assumptions that haven't been reassessed over the years. In this case, the assumption that a couple copper wires were the primary driving factor in whether someone had access to modern telecommunications. Today, wires aren't actually necessary in most cases in the first place. The land line for dedicated voice service at home is rapidly fading into obscurity, and even home access to Internet services in some rural areas is arguably losing the wires and transmitting to antennas or mobile devices where conventional wired broadband is unavailable.
I'm just having a really hard time seeing this subsidy as necessary in this day and age.
Rural Rich? Bullshit. (Score:5, Insightful)
Its main effect now is that poor people living in urban areas are subsidizing rich people living in the country.
Uhhh, I grew up way out in farm country in Ohio. I have lived in five different major metro areas. The people in the country are not rich. What kind of bullshit psy-ops lobby-funded advertising is this, and why is it being parroted blindly here? Let's just do a quick bullshit check. One web search, second hit, talks about a study done in Oregon:
In 2011, the (per capita personal income) in non-metro counties was $31,383 and in the metro counties it was $39,267; a difference of $7,884 (25 percent). The difference was due primarily to the difference in earnings from work.
Obviously that's just one data point, feel free to do more comprehensive research yourself. I'll tell you from personal experience; people in the country make less money on average than people in the city. This report is some assholes like the Koch brothers, a lobby called "Alliance for Generational Equity," trying to create infighting so they can drown the government in the bathtub. Let's not start being their lickspittle mouthpieces, parroting their easily debunked lies.
Re:Government math (Score:5, Insightful)
Land line is most certainly required in rural areas if for nothing else than emergency services. When you are 20 minutes to an hour away from a medical facility you don't want to run into a situation where you can't get a cell signal or the cell service is down. I would wager 95% of rural residents pay for a copper wire even if they don't use it so they have it in an emergency. At least all the ones I know do.
Re:The urban poor subsidized the rich for a while (Score:5, Insightful)
OK, you can keep your broadband. Us country folk will keep all the lumber, minerals, and produce.
Yeah yeah, and we'll keep all the money, finished goods, and medicine(or at least the intellectual backing thereof). Or... it could be we live in a complex interconnected society, and every discussion of fairness doesn't need to slide into "well our subculture is better than yours".
Re:Rural Rich? Bullshit. (Score:4, Insightful)
So earnings are 25% higher but cost of living is 50% lower. Land and homes are cheap in rural areas. In the town of 600 my Wife is from you can rent a 4 bedroom home for $200 a month, and that was the price as of last labor day.
Yea, there are few jobs and the jobs that do exist are primarily crappy and low paid, but overall the poor rural resident is far better off than the poor city dweller.
Re:The urban poor subsidized the rich for a while (Score:4, Insightful)
Certainly not to the same extent, no.
According to the Institute on Taxation and Economic Policy, a Washington, D.C.-based research organization, Washington families living at the federal poverty level pay 17 percent of their incomes in state and local taxes, whereas the highest-income families pay 3 percent. [seattlepi.com]
Re:The urban poor subsidized the rich for a while (Score:5, Insightful)
Anybody paying for phone service pays for this subsidy via the USF. http://en.wikipedia.org/wiki/Universal_Service_Fund [wikipedia.org]
It's also worth noting that because of the way that the poverty level is calculated, people that are in urban areas don't qualify when they would be pretty well off in more rural areas, if they were making the same amount of money. Which makes subsidies to the poor at the federal level disproportionately favor the freeloading states over the states that actually contribute to the pot of money being used to provide the subsidies.
Re:Rural Rich? Bullshit. (Score:5, Insightful)
I think the objection here is to paying that high subsidy to provide service to the vacation homes of people rich enough to maintain 2 homes, who should reasonably be able to foot the bill themselves. IMO the subsidy ought to only be paid on lines serving a primary residence, ie. no vacation homes and the like.
Re: The urban poor subsidized the rich for a while (Score:4, Insightful)
Not true.
The rich do not become rich by spending. Sure it probably is true that a larger portion of expenditures are subject to sales tax for the wealthy. But, ultimately, a smaller portion of their income is spent rather than invested.
And no, I don't give a rat's ass about them investing their money. Especially given that there's no guarantee that the investments will benefit me or other Americans. And their tax rates are lower than they are for people that are less well off.
Re:Government math (Score:4, Insightful)
If they can't figure out how to make their lifestyle choices cost effective, then perhaps they need to learn how to be self reliant.
Farming is not cost effective. The self reliant method would be for them to stop farming and move into the cities with you, where you can buy all your food from Mexico and China while American fields sit fallow. And then, in the next famine brought about by climate change, you and your family starve to death because America is no longer self reliant for food.
I don't like the idea of subsidizing rich people who want to live in the country, but the idea of subsidizing farmers so that American food products are cost effective (without the troublesome alternative, tariffs on imported foods) makes perfect sense, and part of that includes ways to let farmers collaborate and communicate. How else are they going to access farmersonly.com?
Re:The urban poor subsidized the rich for a while (Score:3, Insightful)
Re: The urban poor subsidized the rich for a while (Score:1, Insightful)
Investments move the economy. I'm not sure why that is considered evil.
Tax incidence and benefits paid (Score:4, Insightful)
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,
You got this one wrong. You have to examine the incidence of taxation [wikipedia.org]. The property owner has to pay taxes but he pays this by passing the cost on to the people renting the property. The actual tax incidence is on the renters, not the landlord. The amount of the tax is irrelevant in this case in determining who is the one ultimately burdened with the tax even if the amount of the tax is just one penny.
For the same reason this is why gasoline taxes are fundamentally a regressive tax (hurts the poor more than the rich). The oil companies do not absorb the cost, they merely pass it along to their customers, more of whom are poor than are wealthy.
There is a cap on the SS tax because there's a cap on benefits.
That would be a more credible argument if they amount paid in equaled the amount paid out in benefits to each beneficiary. Most beneficiaries [bankrate.com] receive more in payments than they pay to social security. And let's be frank, there is a cap on SS tax because the wealthy are a powerful lobby and have undue influence when it comes to financial legislation. Your argument is just some sugar to help get rid of the icky taste of reality.
Re:The urban poor subsidized the rich for a while (Score:4, Insightful)
The guys producing the food win. As much as ag subsidies piss me off, a reliable food supply is the first order of business for any society.