There's no easy answer to erasing a staggering trillion-plus dollar deficit in a federal budget, but you've got to start somewhere -- and Obama's looking at the nation's wireless carriers as cash cows just waiting to be milked. The President's proposed budget for 2010 calls for an increase in spectrum license user fees from $50 million to $200 million, with further increases to $550 million over the course of the next decade, all of which would be on top of the billions carriers have already shelled out in spectrum auctions. A good way to bring in some extra cash? Yeah, probably, but considering that carriers will be more than happy to pass the increases on to consumers, let's just be straight: it's a tax.
[Via
El Reg]
posted Feb 28th 2009 10:41AM
"Let's be clear"........it's a tax. This new President is totally NOT what I wanted. Can we get Ron Paul in there? I didn't like him, but now........his views make more sense.
Great, so, now my Broadband is going to cost more. And it is going to be capped. Great........
This.
PLEASE PRESIDENT OBAMA...
RAISE THE TAXES ON CABLE TELEVISION.... TAKE THAT DEFICIT RIGHT OUT OF rupert murdoch's ASS.
Next time Vote for Nixon's Head!
These fees are still lower compared let's say to Europe and where calls rates are fraction of what AT&T demands.
Given all these lavish CEO compensations go for prostitutes anyway, raising license fees may actually force bastards to sensible business models. Take a look at discussions at dslreports.com forums. Engadget is not telling whole truth here
PS. I bet Engadget got cut in from AT&T. Recall recent interview
Fuck the Ron Paul bullshit. Everyone seems to think he's an internet super hero. Think about some of the stuff he wants to enact and realize how stupid it is.
Ron Paul is a Windows user.
Ron Paul is definitely not perfect, but he's the only major candidate who had the gumption to admit that current levels of spending are unsustainable and had a plan to tackle it. I think his call for an immediate withdrawal from Iraq would've been a disaster, but our level of spending on entitlements such as Medicare, Medicaid and Social Security don't work long term, and the sooner politicians admit it, the better. His plans might be a little extreme compared to what is currently being pushed, but without bold moves towards reducing federal spending, the US is screwed.
Has anyone bothered reading the article from the original source? Here it is...
"WASHINGTON, Feb 26 (Reuters) - The Obama administration's proposed 2010 budget seeks to significantly boost the user fees the U.S. government charges holders of public airwaves held by many telephone and wireless companies.
Yearly fees for spectrum licenses are proposed to rise to $200 million in 2010, from $50 million in 2009, according to the document posted on the Office of Management and Budget's Web site.
After that, the fees eventually increase to $550 million per user per year, totalling $4.8 billion over the next decade.
In the government's most recent spectrum auction, AT&T Inc(T.N) and Verizon Wireless, a joint venture between Vodafone Group and Verizon Communications (VZ.N) spent about $16 billion to get access to the airwaves.
The Federal Communications Commission runs auctions for public spectrum."
1) IT is $4.8 billion over the next 10 years
2) At&t, Verizon have already paid $16 billion in the recent spectrum auction. How much have your bills gone up due this recent auction?? I do not recall engadget running an article saying that At&t and Verizon will be passing the cost onto customers.
3) Has anyone read the stimulus bill? There is so much misinformation coming from the right, David Thomson (Chairman of Reuters) is an ultra neo-conservative.
4) Ron Paul?? The same Ron Paul who knowingly excepted donations from "white supremacist groups?
I swear some people are living in the matrix, we just had a President that came into office when America had a record surplus, who left office, leaving America with a record deficit. Some of you have the nerve to complain, you obviously have no idea that this same corporation that will pay these increased fees are some of very same corporations that got huge tax breaks. While the average American got crapped on!
look at that, a tax and spend democrat.
Who would've thought?
I've never heard of such a thing!
Of course, to be perfectly fair there are tax-and-spend Republicans too... it's just that as long as laws prevent third parties from effectively taking the national stage we might as well have a president that spends the money somewhere that, oh, I don't know, we'll see results? Positive ones? That don't cost us international goodwill?
Or they could, you know, be responsible and not waste money since almost no government program has ever shown independently positive results.
The democrat party is all about help/aid and taxing the hell out of people that get up at 4AM everyday for work or anytime. My neighbors gets $700 a month to go food shopping from government aid and i that work everyday and can't afford to spend more than $300 on groceries that's F*ckup, they don't work and stay home and have shrimp & lobster while am working and eating bullsh*t cereal lol, maybe i should just quit my job and join the party.
Actually, food stamps have been proven to be one of the top 3 ways to stimulate the economy.
@Jamar
Actually, historically speaking, Republicans lowers tax way more and way more often than Democrats. That's what I've learn from an accountant.
Democrats usually raises tax. They have to get their money from somewhere.
@Henry E. AKA the spend-spend-spend Republicans.
lol, thats a nice illustration. :)
Eh, what did you expect? Fiscal conservative (Bush, McCain) = deficit goes up. Obama = increase tax = deficit goes down. Just like Clinton did.
Clinton's small budget surpluses at the VERY end of his administration were at least half due to the spending restraints placed on him by a rabid Republican Congress (and the other half due to tax increases). Clinton didn't shut down the government to shrink the deficit, he shut it down by refusing to sign a budget that would limit his spending more. If he had signed Newt's budget, there would have been bigger surpluses for longer.
Increase in National debt during all 8 years of Bush: 4 Trillion.
Increase in National debt during just 2 years of Pelosi (during Bush's lameduck years): 2 Trillon.
Estimated Deficit for JUST 1 year (2009) after 30 days of Obama: 1.5 trillion with a possible "change" to 2 trillon upcoming. (that is Change you can believe in)
You need to adjust your worldview Greg, or else you're in for a Very disappointing 4 years. These numbers don't even take into account the form of debt included in government promises to the public, like medicare, medicaid, and an impending universal healthcare regime.
Uh, what's your basis for saying the deficit would go up with McCain considering, you know, he wasn't voted in? Besides, I'm not sure the "tax goes up = deficit goes down" argument holds water since it's Obama's own deficit.
@ Greg
Owned
Highly charged Political debate in 3...2...1
Figures.
As if I don't already pay enough in taxes and other government "fees."
my, how quick Obama is to forget about the nation's "most vulnerable" people. he postponed the DTV transition to "protect" the poor (i'm not sure from what), yet he's now going to make cell phones way harder to afford (or maybe he's overlooking the fact that the carriers will simply pass along the $$ to the customers). Cell phones are a more legit necessity than TV.
They'll "simply pass along" the fees because they know that the other carriers will follow. Allow new players that won't do that (through alternative funding sources) and then we'll see things get rolling. 4 carriers and some MVNOs doesn't cut it. I want to see more foreign involvement (if only Vodafone bought the old AT&T) because no American companies seem willing to properly compete.
If you want cheap broadband and wireless fees, make the companies actually compete. It works for every other first world country on the planet, how about ours.
Thing is, they price-fix. 4 cell companies in Canada, same market, no choices, high prices.
Then regulate like we do in the UK, price fixing isn't common and when it is uncovered there a very very hefty fine. Open competition is so fierce in nearly ever market sector here, the government practically bankrupted state-owned business (Royal Mail as an example) because of the sheer amount of competition driving prices stupidly low.
Or more and better regulation. China is home to the biggest carrier in the world- super cheap. Even international roaming into other countries with them is sometimes cheaper than using a local carrier's prepaid SIM (except Hong Kong/Macau, but those are special- also Russia, most of Africa, and some Eastern European countries).
FUCK OBAMA! I don't want my AT&T bill to go any higher, iPhone is already expensive enough.....
That's your own fault. You knew what you were getting into with the iPhone
Then keep your fucking money in your fucking wallet, knut. You're NOT ENTITLED.
He knew by buying the iPhone he was consenting to Obama tax increases?
Come again?
AHAHAHAH!!!!
You dumb Americans got Shawshanked!
You should have voted for Clinton... Scratch the two idiots out on your ballot and write Clinton...
its the only way you americans can Redeem yourselves...
Oh wait i live in CAnada now, I have to deal with our own brand of idiots...
AHAHAHAH talk about double pwnage.
french canadians?
No, French Canadians are classy, Quebec is the place that is full of trash...
These people are not french, the french are insulted to even be mentioned in the same conversation as them...
They are quite frankly garbage. I know. I live there...
Nooo!
Let this be an example to you Americans.. Crush your enemies.. show no mercy.. because they will become a cancer later!
AHAHAHA!!
Well, considering President Clinton already had two terms...
Obama was supposed to be the "tech" president? Nothing like exorbitant tax to stifle continued innovation. LOOK at all the "CHANGE"-------- leaking from the world (and my pockets)!!
Nice touch on the graphic, Chris!
This really gives the lie to Obama's promises for middle-class tax cuts. He wants to soak the rich to pay for health care, but his plans for cap-and-trade on emissions and now increasing spectrum license fees are hidden tax increases that will be passed on to consumers and ultimately hurt the middle and lower economic classes disproportionately.
I don't really see how it is going to be "disproportionate." Doesn't the upper class rely on wireless providers as much as the middle and lower class?
The harm is disproportionate, which is what he said. A 2-3$ increase on someone who can barely afford their wireless service in the first place hurts an enormous amount more than the same increase on someone who wipes their nose with Benjamins.
If you can hardly afford the service, you shouldn't be using it.
There are MILLIONS of cell phone users in this country, so this works out to be few dollars per user... if your carrier increases your bill by more than $2-3 OVER THE ENTIRE YEAR then your carrier is the one screwing you over, not Obama
Because Obama can do NO wrong right? ;)
Take a minute and think this through.
Yes there's a huge number of users. A good portion of the US has a cell phone, either prepaid or monthly. But how many of those cell phone users are on family plans? While the increase per month per user is not that much, suppose you have 4 lines. You're looking at an extra $10-15/month, multiplied over 12 months. It doesn't sound like much, but we're supposed to be happy about taking home an extra $13 per paycheck? The numbers add up, and if I gave you $120 today, you could think of better ways to spend it than on your cell phone bill.
Also, not all cell phone carriers have an equal number of users. MetroPCS, for example, has less users than AT&T. Depending on how their rates go up, if you use a smaller carrier the increase will be higher.
You better believe that this will be an extra fee tacked on to the end of your bill rather than built into the cost of your plan.
You make it sound like bills are going to skyrocket...worst case scenario I roam in via China Mobile. I get free incoming texts and pay the same as any local texter in the US- but across North America. I pay less for data than a per-use user would (and again, one rate across North America that's cheaper than either AT&T or Rogers provides to their own per-use users). I pay less for direct-dial international calls than AT&T charges its local users. The only time I don't pay less is voice. I'm charged AT&T's overage rate (or maybe less- exchanged, it comes out to about US60c per minute). Yes, I pay less roaming in than a local prepaid user. For people that would normally be on prepaid this looks better.
@Jamar
Does .70 cent a text sound crazy to you? I mean wireless carrier already charge 20 cent a text when it cost them close to nothing. The bill won't skyrocket but over time it adds up and steadily raises. To the rich, a few benjamin is nothing, to the poor and middle, that's a lot.
I personally never bought into the Obama hype. So far, all I see is taxes taxes taxes and wasteful spending on these bailouts.
@Henry E. -Yes, and rightly so. Like I said, the way to protest this is to make sure profit doesn't fall into their hands by using another carrier. China Mobile charges that .20 per text outgoing while roaming in the US/Canada with free incoming. At home they only charge US.01 per text as well as free incoming. I believe in the market- China Mobile has pretty much set these rates in stone because that's what the market of Chinese users is willing to bear. They'll be selling their SIMs to the US through unofficial channels too if the local price for SMS becomes too much to bear.
@Nick: my bill would go up ZERO if it weren't for this asinine BS.
Well, at least I didn't vote for him, so I can complain. I think there was a sentiment during Bush's time...if you vote for him, you don't get to complain.
I think the sentiment is "if you don't vote at all, you can't complain."
The people who voted against him can be "well I voted for the other guy."
The people who voted for him can say "he's not doing what he promised" or "his ideals have shifted from when we elected him."
For all the Obama addicts who voted the idiot in.....You get what you wanted so deal with it. Hope and Change will leave you with nothing but loose change in your wallets. Oh my that FREE HEALTHCARE aint free.
It's not a tax if I refuse to pay for wireless service. And I will. How about people spend their money responsibly instead of thinking they're entitled to lavish lives of overconsumption? $100/mo for your cell phone? Are you stupid? Dial it back and live a realistic life.
WHAT?!.. Give up my $500,000+ home, $70,000 BMW, $10,000 whores, and now my $100+ cell plan.. BLASPHEMY! what would I entertain myself with when I go bankrupt in.. 3... 2...
I don't mind paying for my stuff and my mistakes. But right now I'm being asked to pay for a whole bunch of other people's mistakes--not the least of which were mistakes made by Congress. I'm not complaining because I feel I'm entitled to stuff, I'm complaining because there seem to be an awful lot of people who feel they are entitled to my stuff.
TO ENGADGET:
Look at the comments in this thread. PLEASE DO NOT POLLUTE THIS WONDERFUL NERD ESCAPIST WEBSITE with political comments in your posts.
I understand you have opinions but please don't let this website descend into the grey, murky waters with comment systems filled with political idiots spouting their rhetoric.
I BEG OF YOU!
Calling a tax a tax is political? Or is being supportive of Obama's efforts to reduce the deficit political? The post looks pretty neutral and even-handed to me. Engadget can't help it if their readers have strong political feelings about gadget news they've delivered in an even-handed way.
And if they could help it, why would they? Political disagreement generally leads to more activity. More activity is a big plus for the blog business model.
What other cost increases should Engadget not report? Are they allowed to tell us when manufacturers increase prices without polluting your geek paradise? What about when carriers increase prices? Can they tell us about that? What about when a company decreases features but keeps the price the same? Can they report that?
Almost every country ask for such taxes; US taxes were to low refering to mobile oferator licenses.
There's no such thing as a business taxes or taxes on mobile o[p]erators. Every tax is a tax on consumers, on people.
When governments bury taxes in regulations and fees and costs that you don't have to pay directly, they're just trying to hide the cost of government from you. They aren't trying to keep you from paying the cost, just keeping you from knowing how much you're paying.
Taxes in the US, even under Republicans, were too high. Not too low. Now we're going to raise the cost of economic activity while economic activity is already on a record setting retreat? That's not saying taxes are too law, that's saying there are too many jobs.
And the taxes ought to stay low. Why? Because the money generated by them will inevitably be wasted on government programs that will do nothing to help anybody in the long run, just like nearly all other government programs in the past. So what's a better solution? Reduce spending by cutting these worthless programs from the budget and leaving taxes where they are. Cut the budget until more is generated than spent. My, that's such a difficult solution to come up with.
High taxes are a way of controlling people. If something's out of someone's price range because of its cost in the free market, that's one thing. If it's out of someone's range because the government wants to jack up its cost, that's entirely different.
If basic cellphone bill becomes too high while economy is in toilet, people will start not to subscribe cellphones. We have more ways to communicate for free than a decade ago for a fee. (messenger, Skypes, email, forums, blogs, etc)
"Eh, what did you expect? Fiscal conservative (Bush, McCain) = deficit goes up. Obama = increase tax = deficit goes down. Just like Clinton did."
Lol...hilarious. You might want to check who took over Congress in 1994. And the fact that we had the 'new economy' crap in the 90's. It was a real gilded age. Bill Clinton wasn't going to reduce welfare or cut down on spending with a bunch of Democrats ruling the roost.
Bush was never a fiscal conservative...and Obama is basically doubling down on the massive spending he started. If you increase taxes, you take money out of the private sector and reduce total tax receipts. How did we get out of the last 2 recessions? By cutting taxes....first in 82 and then again after 9/11....or is your memory that poor? And I don't recall McCain being anything other than a hybrid Democrat/Republican Senator that never had anything to do with any important policies...other than that 1st Amendment savaging "campaign finance" BS.
Cry cry all day about how private citizen CEO's spend their money...the fact of the matter is that politicians in Washington are buying the same high priced hookers and flying private jets all over the world doing fact finding tours in Aruba. And guess what? You are paying for all of that with TAX money. And they don't have to apologize for screwing up and they never get fired.
Corporations don't pay a dime in taxes. If the government takes 8 percent off the top, they pass that along to you the paying customer. If they can't compete with companies in other countries that don't get taxed as much, they go out of business. But they do not pay taxes...they pass it along or pass away.
Politics are not a sport where you pick a team and cheer them to the endzone every cycle. You have to understand that taxes NEVER GO AWAY. Government programs never stop getting funded.
If you think the government, no matter which party is in power, can better spend your money than you can, then keep cheering. If not, join the rest of us that are a little bit worried about the amount of debt and taxes we are piling up day after day.
I'm sorry but I'm more worried about the Chinese and other hedge funds having a stake in our Government, than I am about building a missile defense shield around the world. So yeah fixing our trillion dollar deficit is a National security issue which should have the highest priority. It is true that our Government has expanded way too large for its own good, but not at the expense of social security, or the welfare of its citizens.
Now in regards to corruption, and Senators getting away with sponsored leisure trips at the expense of either lobbyist. While on the Senate, then Senator now President Obama cosponsored, pushed and passed the Congressional Ethics Enforcement Commission Act of 2006. Even people in his own party like Harry Reed (Senate majority leader) opposed this legislation for viewing it as too harsh, if that doesn't reflect a departure from failed policies, I don't know what does. More impressively the President have set the same ethics standards for his administration. I'm not saying everything is perfect, nothing is, and much less in the state we find ourselves today, but it is our responsibility to act upon the uncertainty we now face. I dislike taxes just as you do, but I have no choice but to pay the price (even for the mistakes a president I didn't elect, and a party I don't belong to made).
if this was gizmodo the wanna be/poser "geeks" would be foaming at the mouth thanking Obama for doing so. Thank god engadget has people who think!
You're right -- this proposal is exactly what the wireless industry needs to help curb overconsumption. I hope the increased gas tax is implemented soon to force people to treat their cars a little more responsibly, too.
Because Bush delivered worse than nothing. He drove America right into the ground.
How quickly everyone turns, that didn't even take two months!
Obama's approval is still in the 60% range. It will take a really long time for information regarding deficits and taxes to make their way to most people. And then it could take even longer before they decide what to think about it.
It's only the most informed and most watchful that know what is happening at the moment, and know what it ultimately will mean to them.
Right and more amazingly I still see idiots with Bush Cheney bumper + stickers around town. I bet they are proud on how they drove our country to the ground.
Look fuck these telecom scumbags... Im glad they are getting milked. Im looking forward to google giving me wireless broadbandso I can skype, sms,IM, and browse the web for less than $90 a month.
I cant wait to give all my money to obama!!!
Man is he awesome or what!?!?!?
You're being too polite, Jamar.
Aren't you other American readers also tired of being milked?
No.
just gonna make our cell bills more. the companies won't (and should have to) just take a loss... damn this dude is stupid.
Did you consider not paying for it? Or scaling back? Have you considered LESS?
I didn't know so many Engadget readers were Republicans.
Ever hear the old line that no one is an atheist in a foxhole? Well no one is a democrat when it's THEIR taxes that are going up.
And get ready for a Republican revolution too, because with a 4 trillion dollar budget, the top 2% don't have enough money to pay the piper, even if we just take it all. Obama is going to need money from the middle class, or he'll have to mortgage all our futures through borrowing and money printing. He'll probably have to do all 3.
The Republican party probably would be effectively dead due to their own incompetence. But with Democrat policies like we've seen in the past month, the GOP won't be gone long.
This isn't going to help the economy at all by raising fees and taxes on everyone for stuff they use every day. Their ideas to try to better the economy is to just raise federal spending on things that aren't needed. Instead of putting money back into the pockets of american citizens to help the economy, they are sucking us dry with increased taxes and fees to pay for the governments increased spending habbits. Yeah this economic "plan" isnt going to help us out at all.
OK, I hate politics on a Tech blog but here's my little rant.
Shocker, no one likes taxes.
Sorry gang but, It's time to own up to the problem. There's no easy way out of this. Period. Doesn't matter if it's "not you fault". The country is in trouble and like it or not, we all get to chip in to help fix it. Doesn't matter if you disagree with the method. Too late. November was last year. Yeah yeah, you are the most responsible person with your money and your only fault here is you happened to be born in the country so, you have to suffer. Get over it. Try being born in Iraq, Iran, North Korea, Rwanda, even Mexico.
Free ride is over. At least the money is being spent here rather than on yet another war. Talk about tossing money down the drain.
Life isn't always easy. If the worst thing in your life is a higher price on a cell phone call, you have a soft head and a serious case of tunnel vision.
Unbelievable. SENSE!
You can scrap all other comments after reading the above.
I think u got a little brain washed for the 8 years of Bush we had. Put it like this, when Bush left a deficit of 1 trillion due to the war he started (which he shouldn't have) people don't complain, when that money could have gone fixing other parts of US.....and now that Obama is trying to fix this crap people like you complain.
Another great plan by the greatest taxing president..FAIL
Planning a way out of a dangerous situation that has cost America tons of international and domestic goodwill, lives, and money- WIN.
Supporting gender equality- WIN.
Not having a VP candidate that is a magnet for scandal and ridicule- WIN.
Pricing this finite resource higher as more of it is bought up, reducing supply- common sense WIN.
You FAIL for pronouncing yourself without reading the actual proposals or getting a little bit more informed about the issue and how the policy will be actually implemented. Ignorance is indeed our worse enemy.
Oh no, it's quite clear. In these times people will cut back on anything that's non-essential. People with landlines will see their mobiles as extras. The telecoms can't pass it all onto their customers because they'll cut back or cancel. So it's definitely common sense.
I'm opposed to tax increases to, but, Chris, could you please remove the commenters advocating assassination? Srsly. It's not funny.
Actually there ARE easy solutions to ending the federal budget deficit. The answers are (in no particular order):
1. Massive tax increases.
2. Crippling spending cuts.
It just happens that someone somewhere will be screwed by any answer.
As an exercise for the reader, figure out how much would be saved by ending the military action in Iraq/Afghanistan while simultaneously ending Medicare/Medicaid and Social Security. I think you'll find there's more than enough money to go around.
Another fun fact for the road, did you know the top 25% of Americans cover 90+% of the taxes collected from citizens? It also happens they do not make 90+% of the income of America. Consider how someone defines the word "fair" in order to apply it to the tax situation?
I'm not going to sit here and fight with people over political opinions. Taxing big business unfortunately doesn't work. You can keep your opinions. I'll keep mine. I'm simply saying this particular tax does nothing, but take more money out of regular America. The same working people who take care of the non-working people. I respect GenKhan2's comment more than any of the others.
It isn't a tax. A tax is defined as:
"1 a: a charge usually of money imposed by authority on persons or property for public purposes b: a sum levied on members of an organization to defray expenses 2: a heavy demand"
You don't really have a choice in pay a tax or not. In this situation, if AT&T, increases rates you and can opt to cancel the service. It isn't a tax at all...sheesh.
How do you know it's just at&t and they won't tax others. I'm sorry in the end it's a "tax" that will be passed on to users. Truly I would say it's a regulation fee. I regulation that no one can get around.
I'd hope people would be more objective and concerned about rolling out a military effort in Afghanistan, and the milking the telecom cows. For I foresee the price tag and over all cost of a conflict in Afghanistan far more significant that increasing fees on the communications spectrum.
First of all, the person that wrote this article ranted his/her political view in with the article.
This is Engadget, lets keep it as a new and future gadget blog.
when Obama got the elected I saw this, there is no suprise her, this government wants to do for the middle calss and the poor what Bush did for the rich and the well off (help them).
that said, I am all for taxing cigeret, alcohol and Cable (mostly Crap TV any way), I would even add Video Games to this list as I see them as non essentials.
I am not for rasing tax on gasoline or cell phones rates.
I benefited for Bush greatly but lost most of it and in some casee all of my gaines in the stock market. I am willing to pay more for cable TV and as I don't smoke or drink in excess I am ok with taxing those as there not essentials.
Unfortunately when you impose taxes, fees, etc on to major companies they will simply pass it on to customers. So let's say you have 500,000 subscribers. 100,000 leave because of this. They can still distribute it among the 400,000 people..those same 400,000 that require their service for various reasons. More tax has never worked, look at it here in the UK. Socialism my friend. It has never worked.
Hrolf, I see you point but I disagree.
An import tax is a tax. You can choose not to import things. It's still a tax that you opted out of.