TELECOM Digest OnLine - Sorted: Re: Gore Tax Increase

Re: Gore Tax Increase

John Levine (johnl@iecc.com)
10 Jan 2005 02:09:55 -0000

>> There are four components to the Federal Universal Service
>> Fund. They are:

>> * Low-Income.
>> * High-Cost.
>> * Schools and Libraries.
>> * Rural Health Care.

> Golly gee. How ever did these people get telephone service before Al
> Gore came along and gave us the Algore tax (a.k.a. the Federal
> Universal Service Fund)?

USF to support low income and high cost have been around forever.
Back in Bell System days it was mostly transfers inside the Bell
System where it was largely invisible. The school and library and
rural health care parts are new, and I agree that their adminstration
leaves something to be desired.

> If the Algore tax is all so wonderful, why is it that in 1977, I had
> basic telephone service for under $10, and now I pay at least $25?

Let's plug those numbers into the Bureau of Labor Statistics' CPI
calculator. $10 in 1977 is a little over $31 today. In constant
dollars, your monthly service has gone down. And if for some reason
you wanted to call me, a call from Seattle to New York in 1977 would
have been about 30 cents/min which is about 95 cpm today. But we know
that today's toll rates are under 5 cpm.

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