Thursday, September 18, 2008

Go Fly a Skype

Skype is a super concept for contacting people at a great distance. I had a student in California that checked in with his sponsor in China every day, etc. But, my point concerns the undercutting of the PSTN, better known as the phone company, which supports much of the long distance digital traffic via their lines. Why? Because they own the right-of-way across those great distances and charge ISP providers for its use. At some point the two costs converge and you bite the hand that feeds you. The question is, where is that point, and can we pass it and still save money? If your ISP provider raises rates to pay the PSTN increases, the value of Skype sinks. But, I must conclude that we will all probably be better off.

There is still a gorilla in the room that we are ignoring, and this is the real threat. One of the reasons phone rates are high and confusing is the government taxes the piss out of landline telecommunication companies, the PSTN. They always have, so it is something the PSTN can't get away from, except to pass it on to you. If future revenues are threatened by systems like Skype, how will the government react to this trend? After all, their paycheck comes from your tax dollars.

One of things government has regretted ever since they unleashed the Internet and let it run away is not setting up a tax structure for its use on day one. The overwhelming backlash every time they try to slip in a tax keeps them at bay. But if the PSTN cries foul competition pressure, due to cheap undercutting of their business using Internet tactics, they could get their day in court, which is a government agency in itself. This could open a door to get back into the concept of taxing the Internet.

I would like to hear from savvy ISP CEOs about this issue. What are the facts and how can we as users avoid triggering a government interdiction mission? Here in California, the State government is trying for a second time to railroad in a bill to tax downloads from the Internet. Yes, there is a backlash, but people have to pay attention and write their representatives. It seems politicians are more frequently using our right to vote against us by writing up deceptive propositions, hoping to get one voted in. Then you get the big surprise when they tell you, “Yes, you did vote to have your Internet service taxed, see.” They hold up the proposition tally and smile.

John Wolf

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