NII, Competing Visions

Viewpoint:

Issue: Funding

Who Pays?

From the EFF's point of view it's quite clear that the installation of the NII will, at best, be a combination of private and public efforts. Private efforts will most likely predominate. The free market approach points to the telephone system (a phone services that was both cheap, affordable and world class) as a model for the creation of a national network. However, this phone system grew up under the umbrella of the Telecommunications Act of 1934, where profits were regulated and based, at least in part, on a percentage of invested capital. This encouraged investment by monopolistic entities, most of which were owned by AT&T in the form of the 36 operating companies. That system does not exist today. Further, there was subtle but massive subsidization of the personal network by the business and government expenditures, where government and business customers in essence paid for the low cost of personal use. There were also significant tax implications and sheltering of the income from the telephone companies due to innovative and creative depreciation schedules and other supportive tax policies. Therefore, given the fact that there will be significant expenditures by tax payers in the network, even if only in terms of standards and regulations, the question arises, how will that be funded? Certainly, private investment should be a major component. This area of discussion is crucial...who will pay for this electronic community for more information send email to

nii-teach@wais.com.internet

Tax implications

the EFF believes that without some sort of a policy that encourages educational activities on the net we will rapidly wind up with high-cost, high-profit applications dominating innovation. Witness the spread of sex-related activity. What will be the electronic equivalent of TV's vast electronic wasteland? Is there a role for a PBS-style NII entity? Who knows. In any case, what is the prudent public policy to be implemented in order to raise dollars and what is the appropriate taxation policy? Should there be something analogous to the spectrum usage fee common in other governmental structures which taxes the providers, or should there be a BBC-style personal computer tax? Unfortunately, the U.S. House of Representatives has been lax in its attitude about this issue.

Fee regulation

Under funding, the EFF sees there to be a crucial issue of how fees are to be regulated, if at all. If personal fees are a primary source of revenue, how are they to be regulated? From an educational point of view, high fees impact directly upon access to network resources. Further, if fees are not to be a major source, but advertising is, then how is the content of advertising to be governed? With a lower fee, for instance, experiments are under way that require users to download logos; in essence, commercials are provided to you whether you are interested or not.

Note: the views expressed in this document are an interpretation and unless explicitly noted do not represent the actual viewpoints of the named organizations.

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Vanessa Stevens, vs94@columbia.edu