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IP: Network taxation is REAL and HERE
From: David Farber <farber () cis upenn edu>
Date: Sun, 12 Oct 1997 22:44:32 -0400

The congress sensing the smell of dollars that  can be grabbed have decided
in a House/Senate conference that the Next Generation Internet activities
of the NSF are be funded through the  Research and Related Activities
budget, and are to receive up to $23 million from the collection of domain
name fees. 

In case you were not familiar with the pocket that the $30 Million will
come out of, it is a "TAX" ( 30 %) on the $50 registration fee that NSI
collects under the cooperative agreement and holds. While the intentions
within the NSF DNCRI have been shown to have been naive, they thought at
the time that  the portion of the fees could be used,  not for Internet
operations, but for preserving the Internet intellectual infrastructure,
most especially the independent operation of the IETF secretariat.  The NSF
wanted the Internet community to coalesce around the best way to use these
monies.  They thought that such would happen. unfortunately they were wrong.
The congress has now done a preemptive grab for those funds to use for the
NSF NGI support. If that is not a TAX I have not seen one (well the
Executive wants to call such user Fees in the FAA case).

There are a lot of issues here. They include the right of the congress to
say to NSI to write a check to the NSF for that monies. The cooperative
agreement seemed as usual vague on the issue of how to expend the funds and
who controlled them. Second and more important, the Administration has
called loudly for no taxes on the Internet at this time. If the grab
succeeds,. you can bet your bottom dollar (pound, mark etc) that other
governments large and small, domestic and foreign will follow in the lead
of the congress and arrange to impose fees that can be used to fund a
variety of activities. You can also bet that the congress will elaborate
such mechanisms if this one works.

I have been opposed, since the ANS slush fund days, to the establishment of
such "fees" as part of the NSF agreements it did with network service
providers. Such  funds often escape public accounting. At least this one
will not suffer that fate.

I wonder in the future if the congress will not try to impose a 5 cents fee
on sending notes such as this. 


PS: there is a larger issue that should not be lost in the inevitable noise
over this tax. The NGI is critical to the welfare of the US leadership in
communications research and commercial strength. We must not allow the
importance of this activity to be compromised and delayed while we try to
place the responsibility for any mischief the congress has engaged in. See
my Tokyo Diary #3.

"Photons have neither morals nor visas"  --  Dave Farber 1996

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