Politech: Weekly column: will Congress tax Internet chat?

[Declan McCullagh <declan () well com>]

http://news.com.com/2010-1028-5281883.html?tag=nefd.acpro

Taxes on tap for Internet chat?
July 26, 2004, 4:00 AM PT
By Declan McCullagh

Tiago Bittencourt Silva started an ambitious programming project last 
month: an open-source utility that lets small groups of Internet users 
communicate through instant messages, video links and audio chat.
Silva's project, called p2pCommunity, is designed to appeal to groups of 
2 to 100 people who want to collaborate on writing papers or designing 
software applications. He's already made a pre-alpha release available 
at no cost on the SourceForge distribution site.
Thanks to a bizarre move by Congress last week, p2pCommunity and 
hundreds of similar projects could end up paying taxes to state 
governments to prop up the antediluvian scheme of running copper wires 
to rural households for analog phone service.
Existing law imposes those taxes on cellular and landline customers to 
subsidize rural customers, and state officials are hungrily eyeing the 
Internet as a rich additional source of untapped revenue.
"Open-source software like mine can't pay any taxes, so the audio chat 
features of the program may need to be taken off of the program, or the 
users will need to pay the tax to use it," Silva says.
It's not clear why programmers like Silva and companies offering 
commercial voice software must subsidize rural telephone companies. By 
that logic, Congress should have forced Henry Ford to pay for horse 
troughs. It should have also extorted cash from laser printer 
manufacturers on behalf of the dying manual-typewriter industry.
[...remainder snipped...]
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