Taxpayers Protection Alliance
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Category: Telecommunications

  • Report: Billions Wasted Annually On Federal Phone Subsidies

    Michi Iljazi on July 10, 2013

    The coast of Maui, HI (Courtesy Wikimedia Commons)

    Everyone remembers the story last fall of the infamous ‘Obama Phones’ and how it was yet another example of government waste gone wild. Individuals nationwide were given subsidized cell phones costing taxpayers more than $2 billion dollars, and what was worse was the revelation that some individuals taking advantage of the program were in turn selling the phones to make a profit. Now, in a stunning revelation, a study to be released later today (July 10) by Thomas Hazlett, a George Mason University Professor and former chief economist at the FCC, and Scott J. Wallsten, vice president for research and senior fellow at the Technology Policy Institute and senior fellow at the Georgetown University Center for Business and Public Policy, will show that the Federal Communications Commission has thrown away more than $60 billion in the last fifteen years on service extending phone subsidies. The program not only billed these subsidies at a high cost but the service only went to one-half of one percent of total U.S. households.

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  • Tennessee Telephone Pole Dancing

    David Williams on March 1, 2013

    Telephone poles

    Today (March 1) the Taxpayers Protection Alliance (TPA) sent a letter to members of  the Tennessee House and Senate urging them to vote against a bill that according to the Chattanooga Times Free Press “would allow Tennessee's electric cooperatives and government-owned utilities to charge an exorbitant amount for cable and telecommunications companies to use electric companies' utility poles.”  This legislation would stifle Internet and phone service deployment and ultimately hurt consumers. The Tennessee-based Freedom to Connect states that, “Attachment rates are sky rocketing. In fact, in Tennessee public power companies and co-ops charge rates that are among the highest in the entire nation – rates averaging $17 per pole attachment. Some Tennessee power companies are charging as much as $30 per attachment, nearly 300% higher than the national cooperative average of $10.38 and more than 400% higher than the rates charged by investor owned utilities.  The House and Senate bills would force providers to pay millions in additional pole fees, which in turn would mean phone and Internet providers would have to raise rates.  This is bad for the free market and bad for consumers.

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  • Another Questionable Government Owned Network

    David Williams on January 11, 2013

    Cable tv

    (TPA would like to apologize for anybody who is trying to read this blog posting on a government owned/taxpayer subsidized broadband network that is taking forever to download) Taxpayers understand the need to fund essential government services like public safety and transportation.  What taxpayers don’t understand is when the government ventures into areas that they have literally have no business being a part of.  The failure of government owned cable television/broadband networks across the country have reminded taxpayers of the proper role of government and that taxpayer funded cable television/broadband is NOT an essential function of government.  The most recent example of this failed multitasking is with a cable television/broadband company in Groton Connecticut. As the Groton Patch newspaper reported, “Groton City borrowed $34.5 million to build an independent cable company to give viewers choice. Last month, it sold Thames Valley Communications for $150,000 to the only taker.”  The failure of this (or any other) company is bad news but this fiscal disaster is compounded by the fact that this company was taxpayer subsidized and the collapse could have been entirely avoided.  At the time the idea for a new cable company was floated people in the Groton area were already served by established cable providers like Comcast, with AT&T nipping at Comcast’s heels by planning to serve Groton.  With satellite service, this would have given Groton residents plenty of options without using taxpayer dollars.

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  • New Study Shows that Wireless Taxes Take Bigger Bite

    David Williams on November 21, 2012

    Like the inch worm that travels miles by merely lurching along inch by inch so too do wireless taxes continue to creep up bit by little bit. In the same way as the inch worm, these taxes are often just a small amount here and a little bit there, but after a while those “little bits” add up to quite the hit on your bottom line.  Before you know it, the tax burden coming from federal/state/local wireless taxes and fees take more and more of your money, meaning you’re left with less and less to spend on other goods and services.    A new study by Scott Mackey of KSE Partners does a great job of putting into perspective just how much the steadily increasing wireless taxes and fees burden you and your family, the American consumer. For example, the study found that the average American now pays more than 17 percent in monthly wireless taxes and fees - up from an average of 16.3 percent in 2010.  This breaks down to a little over a 5 percent increase in taxes in just two years.  If rates continue to rise at these speeds, the comparison to an inch worm won’t work.  A road runner, unfortunately, may provide a more fitting description.

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  • Congress needs to get the FM Chip off Our Shoulders

    David Williams on June 19, 2012

    It’s becoming quite the “in” thing in Washington for industries to request a government carve out once their product is no longer “in” – as far as consumer purchasing trends go.  Enter the broadcasters.   This group, like many before it, is imploring Congress to create a mandate.  In this case, the mandate will force all mobile devices to include FM chips. With fewer and fewer radios purchased, broadcasters have good reason for concern about the future prospects of their product. Thanks to the technological advances of services like Internet radio and online purchasing and downloading of music, consumers have new, more convenient options to allow them to hear their favorite tunes on their terms. 

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  • Coalition Urges Stricter Oversight of USDA Broadband Program

    on May 22, 2012

    Today, a coalition of taxpayer and free market groups sent a letter (read letter here) to the Senate as they complete work on the reauthorization of the Farm Bill.  The letter urges stricter oversight of the Rural Utilities Service’s (RUS) Rural Broadband Access Loan and Loan Guarantee Program, which was established by Congress as part of the 2002 Farm Bill.  Its primary goal is to provide loans to help bring Internet broadband service to unserved rural communities, which are generally defined as communities with populations of less than 20,000.  RUS has had a history of approving loans to companies who build broadband systems in areas that are already served.  And, the areas where these companies build are often already served by multiple private broadband providers.  According to a report by the USDA on April 23, 2012, “We found that RUS had not maintained its focus on rural communities most in need of Federal assistance. This is largely because its definition of ‘rural area,’ although within the statutory guidelines, was too broad to distinguish between suburban and rural communities. As a result, RUS issued over $103.4 million in loans to 64 communities near large cities.” 

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  • The Cable Industry Needs Less Regulation and More Freedom

    David Williams on May 17, 2012

    Cable TV

    Fortunately, the free market doesn’t work like group projects in grade school where one poor performer could bring down the grade of the entire group.  When one company fails or does not adequately meet customer demands, it may go under – but usually this does not lead to the failure of an entire industry. And that particular company’s shortcomings don’t typically have negative repercussions on the industry or hold the future of the industry back.  That is unless – or until – the government regulates that industry.  There has been a concerted push to regulate the broadband industry and make it into a quasi-public utility and the repercussions could be disastrous.  Another thing left back in grade school is a teacher to go cry to when things don’t go one’s way.  But that hasn’t stopped Netflix from pouting over a new specialized service Comcast is offering.  The service allows Comcast’s Xbox 360 customers to stream thousands of movies and shows from XFINITY On Demand without counting against the data usage threshold that applies to broadband internet access services. (And it should be exempt from such a data cap because the service in question is a cable service, which would render the rules governing Internet streaming inapplicable).

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  • RUS Never Sleeps, It Just Grows

    David Williams on March 19, 2012

    Every time that Congress debates and crafts a new Farm Bill there is an opportunity for them to either embrace free market reforms or continue business as usual.  This year is no different as Congress crafts the latest Farm Bill.   From agricultural subsidies to government run broadband, this Farm Bill, along with every other Farm Bill, is a reflection of members of the House and Senate and their desire to embrace the true tenets of the free market or continue the wasteful inefficient ways of the past.  There is no other issue that is pervading the government more than the obsession to spend as much money on government funded broadband as possible.  There multiple ways that the government funds broadband and the Rural Utilities Service (RUS) is the way it is funded in the Farm Bill. Unfortunately, RUS's track record is abysmal as more money is spent to subsidize service in areas that are already served.  All hope is not lost.  With vigorous attention paid to the deficit and debt, taxpayers are even more aware and vocal about the financial strains of the federal government.  As House and Senate Ag Committee members craft this year's bill they should ensure that the new Farm Bill requires RUS approved loans to include 90 percent of households without any broadband service.  This would be a significant step forward in crafting a fiscally responsible Farm Bill.

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  • UNintended Consequences of an Internet Takeover and a New Tax

    David Williams on February 24, 2012

    The United Nations has been very busy these days with talk of taking over the Internet and the World Health Organization (WHO) moving at lightning speed to implement new tobacco taxes.  According to The Daily Caller, “On Feb. 27, a diplomatic process will begin in Geneva that could result in a new treaty giving the United Nations unprecedented powers over the Internet. Dozens of countries, including Russia and China, are pushing hard to reach this goal by year’s end. As Russian Prime Minister Vladimir Putin said last June, his goal and that of his allies is to establish ‘international control over the Internet’ through the International Telecommunication Union (ITU), a treaty-based organization under U.N. auspices.”  The WHO describes its new tax regime, The Solidarity Tobacco Contribution (STC) as "a novel approach developed by the World Health Organization (WHO) in response to the recommendation made by the High-Level Taskforce on Innovative Financing for Health Systems to ‘expand the mandatory solidarity levy on airline tickets and explore the technical viability of other solidarity levies on tobacco and currency transactions.’”  Both actions could mean bad news for consumers and taxpayers.

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  • FCC Almost Fumbles Super Bowl in Boston

    David Williams on January 30, 2012

    There is no doubt that the citizens of New England, and in particular Boston, are focused on the Patriots going to and winning the Super Bowl.  What they didn’t realize is that Washington, D.C., and the Federal Communications Commission’s (FCC) retransmission consent rules, almost stopped them from watching the Super Bowl.   According to a January 26, 2012 article in the Union Leader, “Villandry is among 200,000 DirecTV subscribers who may be blacked out from watching Super Bowl XLVI, the result of an ongoing dispute between the satellite provider and Sunbeam Television Corporation, which owns the NBC affiliate in Boston. A conflict over retransmission consent fees has prevented DirecTV customers in Greater Boston and New Hampshire from watching NBC since Jan. 14.”  Luckily, an agreement was reached to ensure that the game could be watched by those DirecTV subscribers.  The threatened blackout was a reminder of how Washington policies continue to hinder the free market from working.

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  • Government Bytes the Dust

    David Williams on January 20, 2012

    There are situations and stories that really crystalize the differences between the private and public sectors.  A report by reveals one of the moments in its January 19 article “$356 Million Later, the Justice Department’s Wireless Network Still Sucks.”  According to the article, “After 9/11, three federal law enforcement agencies planned a massive project to replace a mishmash of aging and obsolete radios used by thousands of federal agents. A decade and $356 million later, the program has made ‘minimal progress’ and the Department of Homeland Security, one of the project’s key partners, wants little to do with it.”  This is not surprising considering the technological ineptitude of the federal government.

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  • A New Year Means New Challenges and New Opportunities

    David Williams on January 3, 2012

    When the 112th Congress took over in January, 2011, there was quite a bit of excitement and anticipation that the newly elected members (including dozens of tea party members) would be aggressive in demanding real spending cuts and accountability.  With a near-miss government shutdown in April, a debt ceiling scare in August and the failure of the super committee in November, last year was filled with missed opportunities to institute real spending cuts.  With the federal debt eclipsing $15 trillion in 2011, Congress has quite a bit of work to do in 2012.  In addition to the annual budget fiascos that are typical of Washington, D.C., there are seven key areas (Agriculture, Defense, Energy, the Food and Drug Administration/Centers for Disease Control and Prevention, Tax Reform, Telecommunications/Technology, and Transportation) that will determine if Congress and the President are serious about bringing spending under control and having a more efficient government.

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  • Stimulus Update: Broadband Program Doesn’t Connect (Part II)

    David Williams on December 22, 2011

    Last week, the Taxpayers Protection Alliance (TPA) reported on the failure of the National Telecommunications Information Administration’s (NTIA) Broadband Technology Opportunities Program (BTOP) to complete any projects (read full posting here).  Now, as promised, Part II of the series focuses on the Rural Utilities Service’s (RUS) $2.5 billion handout from taxpayers through The American Recovery and Reinvestment Act (aka The Stimulus Bill) for broadband deployment.  Even with less money allocated to it than BTOP, RUS has experienced more problems and even bigger questions about the federal government’s role in funding broadband.

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  • Stimulus Update: Broadband Program Doesn't Connect (Part I)

    David Williams on December 16, 2011

    The American Recovery and Reinvestment Act (aka The Stimulus Bill) was supposed to lift the country out of its recession and be an engine for economic growth and job creation.  More than two years and $800 billion later, the taxpayer horror stories are still rolling in (read TPA Senior Fellow Drew Johnson’s blog posting on stimulus funded alligator wrestling here).  Now, we find out that one of the key programs of the stimulus bill has had ZERO success.  According to a December 12, 2011 article in the Daily Caller, “As of the third quarter of 2011, no projects from the federal government’s Broadband Technology Opportunities Program (BTOP) — a technology stimulus program funded by the American Recovery and Reinvestment Act of 2009 (ARRA) — have been completed.”  This revelation comes as no surprise to the many folks who questioned the expenditure when it was first announced.

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  • FCC Report Exposes Questionable 9-1-1 Expenditures

    David Williams on November 29, 2011

    Besides the occasional goofball complaining about a non-delivered pizza or somebody asking how to work his iPhone, most of the time when somebody calls 9-1-1 they are experiencing a dire emergency and need the system to work quickly and efficiently.  While some telecommunications taxes and fees may be controversial, mobile (and landline) customers understand the need for an efficient 9-1-1 system and are willing to pay for that system.  The number of 9-1-1 calls and the amount collected is staggering.  According to CTIA-The Wireless Association®, “Every day, 396,000 9-1-1 calls are made on wireless devices. With almost 30 percent of wireless-only Americans, mobile consumers pay more than $2 billion a year for their states’ 9-1-1 funds to ensure our nation’s first responders are properly equipped to handle wireless distress calls.”  A report earlier this month by the Federal Communications Commission (FCC) shows that not all money being collected from the fund is being used for the proper purposes.

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  • Senate Set to Vote on Killing Net Neutrality

    David Williams on November 8, 2011

    UPDATE:  Today (November 10, 2011) the Senate voted along party lines (46-52) to allow the FCC to proceed with net neutrality regulations which will kill jobs and innovation. With all of the issues currently on the table regarding the economy- jobs, taxes, the debate on spending cuts- the last thing our country needs is for the federal government to be distracted.  It is ridiculous that Congress and the Senate have to spend time dealing with matters that aren’t really problems. But that is what the Federal Communications Commission (FCC) is forcing our officials to do. The FCC’s rules on net neutrality are due to take effect on November 20, despite opposition from both sides of the aisle and dissent from throughout the administration.  Having already been rebuked by the House, the Senate has a little less than two weeks to overturn the regulations.  Policymakers should realize that, right now, time is of the essence.  Sen. Kay Bailey Hutchison (R-Texas) is trying to stop net neutrality in its tracks with legislation that would prevent the FCC from implementing the new rules.  With a vote expected on Thursday November 10, 2011, on “S. J. RES. 6:  Disapproving the rule submitted by the Federal Communications Commission with respect to regulating the Internet and broadband industry practices,” the Taxpayers Protection Alliance sent a TPAPB to all Senate offices urging the Senate to vote for Sen. Hutchison’s legislation.  The House has already passed the bill overturning the FCC’s net neutrality rules.  The need for this vote to come soon is critical, as the regulations which the FCC is trying to institute are due to come into effect on November 20th.  TPA urges all taxpayers to contact their Senators and urge them to vote for "S.J RES. 6: Disapproving the rule submitted by the Federal Communications Commission with respect to regulating the Internet and broadband industry practices." (click here to find your Senator).

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  • The Wireless Tax Fairness Act - Taxpayers and Consumers Win!

    David Williams on November 1, 2011

    It’s not very frequently that the Taxpayers Protection Alliance (TPA) reports on a victory, but this evening (November 1) was a banner moment for everyone that owns a cell phone.  The House of Representatives passed H.R. 1002, the Wireless Tax Fairness Act.  This bi-partisan bill, with 236 co-sponsors, freezes all new state and local taxes and fees on wireless for 5 years.  The official scoring entity of Congress, the Congressional Budget Office (CBO), scored it as no additional cost to any level of government.  A true win!  Mobile devices are becoming a popular way to purchase books, music, or just download any content via the Internet.  The Wireless Tax Fairness Act stops states and local governments from imposing multiple or discriminatory taxes on these items.

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  • Trick or Treat! Telecommunications Policy

    David Williams on October 24, 2011

    The Taxpayers Protection Alliance is celebrating Halloween all week long as we present the Tricks or Treats of the federal government over the last year.  Taxpayers should be frightened as Washington, D.C. continues to waste money and pass onerous regulations that will prolong the economic downturn.  The first creepy installment are the Tricks or Treats of telecommunications policy.  Net neutrality and retransmission continue to be the tricks and there is some treat (that may easily turn into a trick) with the Universal Service Fund.  Be sure to check back on Wednesday and Friday for two more sets of Tricks or Treats.  WARNING!! We advise strong parental guidance because some material may not be suitable for children since they are the ones that will ultimately be paying for these tricks.

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  • Opposing Net Neutrality Regulations Should be Bi-Partisan

    David Williams on October 4, 2011

    The new net neutrality rules are set to go into effect on November 20, just a few days before Thanksgiving.  Instead of giving thanks for these new regulations, taxpayers, consumers, and all web surfers will be given the bird by the federal government.  Net neutrality is the wrong solution to a non-existent problem. “Net neutrality,” which is loosely defined as a system that allows information on the Internet to move freely without regard to content is in reality, a not so subtle attempt to regulate the Internet.  The battle over net neutrality has typically been with proponents of net neutrality being on the left side of the political spectrum and those opposing being on the right side of the political spectrum.  The reality is that opposing these regulations should be bi-partisan.  Besides the potential cost to taxpayers and the lack of need to regulate a dynamic industry, the most compelling argument against net neutrality is what happened in Egypt ten months ago when the government denied Internet access to its citizens in the wake of their revolution. » Read More
  • Free Market and Taxpayer Advocacy Groups Urge Congress to Reform the Universal Service Fund

    David Williams on September 23, 2011

    The Universal Service Fund (USF), which is supposed to bring telephone service to mainly rural areas, has its roots in decades-old laws that aimed to solve a problem that no longer exists. The Telecommunications Act of 1934 - yes, 1934 - aimed to subsidize the expansion of telephone service into rural America. The fund’s new goal is to shift the focus of universal service from telephone to Internet service. But Americans should be careful not to assume that refocusing a New Deal program on modern technology will promote innovation or efficiency. Unless we are careful, it might do little more than perpetuate an aging entitlement program by giving it a high-tech paint job.  On September 21, 2011 the Taxpayers Protection Alliance joined with Americans for Tax Reform, the National Taxpayers Union, and Americans for Prosperity to urge congress to make sure that any USF reform focus on reducing costs (read full letter here).

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