President proposes new wireless fees
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| Sat, 02-28-2009 - 8:37pm |
Are we ready for an increase in our cell phone charges to cover a new government fee?
http://news.cnet.com/8301-1035_3-10173072-94.html?tag=newsEditorsPicksArea.0
Obama proposes new wireless-spectrum fee
Faced with a whopping $1.7 trillion deficit, President Obama is proposing tacking on a spectrum license fee to wireless operators to help generate revenue for the government.
The Obama administration's proposal was loosely outlined in the new budget plan for 2009 and 2010 submitted Thursday. In that plan, the administration proposes adding a new fee to be paid by wireless carriers that license wireless spectrum from the government.
These annual fees would start at $50 million in 2009 and jump to $200 million in 2010, Reuters reported. The fees will gradually increase over the next 10 years to $550 million per user per year, generating an estimated total of $4.8 billion over the next decade.
The proposed fees are in addition to license fees that operators have already paid the federal government as part of its wireless auctions. The Federal Communications Commission has been auctioning off wireless spectrum to phone companies and other entities since the 1990s. These auctions grant license holders exclusive rights to the spectrum in exchange for cash.
Over the years, these auctions have generated billions of dollars for the federal government. The most recent auction, which ended in March 2008, was for the 700 MHz block of spectrum that is being vacated by television broadcasters after the mandated digital TV transition. This valuable spectrum generated a record $19.6 billion.
But wireless spectrum is a limited resource. And the government is running out of airwaves to auction. In fact, the Obama administration predicts that it will only be able to generate about $4.8 billion in revenue from wireless auctions over the next 10 years.
Even though the additional fees could help the government halve the deficit by 2013 as well as help it fund several new spending initiatives, it's likely to be met with a great deal of resistance from mobile operators.
So far, none of the big four wireless carriers in the U.S.--AT&T, Sprint Nextel, T-Mobile USA and Verizon Wireless--has been willing to comment on the proposal. And the CTIA wireless-industry association said it's still looking into the matter.
"We are currently reviewing the details of the proposal and look forward to participating in the next stages of this issue," CTIA said in a statement.
Previous spectrum fee proposals have been strongly opposed by the wireless industry, and there's little reason to suggest that the industry would support them now. The big difference this time around is that a Democrat-controlled Congress could be more willing to support President Obama's plans.
More details about the proposal are expected later this spring when the administration releases a more detailed budget package. But any changes to the fee structure would require legislation. And my guess is that the wireless industry would fight hard against it.

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>"Faced with a whopping $1.7 trillion deficit, President Obama is proposing tacking on a spectrum license fee to wireless operators to help generate revenue for the government."<
The $$$ has to come from somewhere.
>"President Obama plans to raise spectrum license fees as part of its plan to halve the deficit by 2013. “Though details on the Obama budget are few and far between, some information was made available. The administration estimates that spectrum license fees would raise $4.8 billion over the next 10 years. And the budget projects $1.4 billion in receipts from spectrum auctions over the same period, reflecting the reality of the dwindling supply of airwaves that are left to be sold” reports RCR Wireless. There will be a steady increase in the fees: “Obama’s proposed budget for the next fiscal year would quadruple the $50 million expected to be collected this year by the Federal Communications Commission for spectrum license user fees, to $200 million in 2010…The spectrum license fees then would increase to $300 million in 2011, $425 million in 2012, and stabilize at $550 million annually from 2013 to 2019, according to the proposed budget” reports EasyBourse. That’s a drop in the bucket compared with what is required to halve the deficit."<
http://www.yourindustrynews.com/obama+plans+to+increase+spectrum+license+fees+to+fight+deficit_25305.html
Other potential increases........
>"The National Association of Broadcasters is "unclear" about the impact of the proposal on broadcasters, said Dennis Wharton, executive vice president at the trade group. Similar fees have been proposed but rejected for about 15 years, Wharton said.
The spectrum fee is one of several proposed in the Obama budget overview. The budget would reinstate environmental superfund taxes at the U.S. Environmental Protection Agency, repeal some oil and gas company tax breaks, and raise taxes on married couples earning more than $250,000 a year and individuals earning more than $200,000 a year.
The Obama budget, which will likely be changed as it moves through the U.S. Congress, also reduces agriculture payments to some high-income farmers, authorizes the FCC to auction domestic satellite spectrum and raises Department of Agriculture inspection fees."<
http://www.pcworld.com/businesscenter/article/160389/obama_proposes_spectrum_license_fee.html
Wireless fees could increase the cost of our cell phones, put more commercials on our radio and TV (for broadcasters to recover costs), increase satellite and cable fees, and limit competition among wireless providers. All these are not good.
Many homes use wireless internet routers, and wireless handsets for their cordless phones. Will there be a new fee for the product makers to pass along to consumers? We will know more as this proposal passes through Congress.
Superfund taxes, may be a good idea, but it will increase costs to consumers. Companies must recover all costs for the products they make. It will also make production in the U.S. less appealing than it is now.
Carbon caps, will add significantly to our electric bills. In Connecticut we have just instituted a CO2 cap and trade for our electricity, the result has been about a 40% higher electric bill. If this goes national, many with low incomes will face tremendous hardship.
By creating artificially higher costs, with wireless fees, superfund charges, carbon caps and what not, our government will make manufacture in the U.S. very unattractive to corporations. This is the opposite of what our economy needs.
The oil tax breaks, were put in to encourage domestic development of oil. This was to help reduce our dependence on foreign oil. With oil trading so low, and no tax breaks, there will be no incentive to produce new fields. The result will be less domestic production of oil over time, and a greater need to import oil in the future.
Edited 3/1/2009 10:42 am ET by postreply
You probably do see a pattern. It's about wants vs. needs. Outside of certain business venues, noone will be forcing anyone to pay these fees. Having a cell phone is a personal choice. If there is an added fee and a person chooses to have one, they choose to pay the fee. It's pretty simple. If someone doesen't like it, give up their cell service. Certain choices have certain costs behind them. You (general you)
Nope noone is being forced to pay the fees.
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Edited 3/1/2009 6:23 pm ET by postreply
I have family that has visited Cuba multiple times. They really like some aspects of Cuba, especially the neighborhood gardens. I believe they are called "organaterias." Everyone puts effort into them and everyone eats from them. There is a sort of social peer pressure to work in them if you are going to take food from them. You do what you can-water, rake, dig, plant seeds.
"increase satellite and cable fees"
My fees go up as regular as clockwork every year so that'll be nothing new. I do have a choice of not having the service or choosing the basic no frills options.
"limit competition among wireless providers"
Competition is already limited. Start-ups have very little chance of survival before they because swallowed up by larger companies. We had a great phone service SunRocket but it was too small to survive then Vonage took it over. Very few independent radio stations still exist they too are being swallowed-up.
>"The administration estimates that spectrum license fees would raise $4.8 billion over the next 10 years. And the budget projects $1.4 billion in receipts from spectrum auctions over the same period, reflecting the reality of the dwindling supply of airwaves that are left to be sold” reports RCR Wireless"<
From.. http://www.yourindustrynews.com/obama+plans+to+increase+spectrum+license+fees+to+fight+deficit_25305.html
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