TELECOM Digest OnLine - Sorted: Re: Gore Tax Increase

Re: Gore Tax Increase

HorneTD (
Sat, 08 Jan 2005 23:06:53 GMT

Clark W. Griswold wrote:

> According to a insert in this month's Qwest bill, the Federal
> Universal Service Fee (otherwise known as the Gore Tax, in honor of
> the inventor of the internet) is going to be raised from 8.9% to 10.7%
> - an over 20% increase.

> This for a program that has so much documented waste and abuse that it
> was suspended for several months. And for a program that if memory
> serves, was originally supposed to cover just the wiring of schools
> for internet service, but has since expanded to underwrite monthly
> operational costs and added all sorts of other eligible agencies. A
> program that now has so many constituents that (like every other
> government program) it now appears to be impossible to kill.

> Sigh. Is it any wonder people are flocking to VOIP and why taxing
> authorities are looking so hungry?

There are four components to the Federal Universal Service Fund. They are:
* Low-Income. This program provides telephone service
discounts to consumers with qualifying low-incomes.

* High-Cost. This program provides financial support to companies
that provide telecommunications services in areas of America where the
cost of providing service is high.

* Schools and Libraries. This program helps to ensure that the
nation's classrooms and libraries receive access to the vast array of
educational resources that are accessible through the
telecommunications network.

* Rural Health Care. This program helps to link health care
providers located in rural areas to urban medical centers so that
patients living in rural America will have access to the same advanced
diagnostic and other medical services that are enjoyed in urban

Most of the funds income is used to subsidize local phone service in
sparsely populated areas where the regulated local phone rate is not
high enough to sustain the cost of delivering service. It is a little
bit like the postal rates to rural Alaska that are low enough to make
it economically feasible for contractors to mail bricks to construction
sights. The rates Alaskans pay for parcel post are subsidized by the
rates paid by the rest of the nation.

-- Tom H

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