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Home Broadband

The Power to Tax is a Duty to Defend

by Dana Blankenhorn
March 29, 2006
in Broadband, Broadband Gap, Communications Policy, Competitive Broadband Fiber, copyright, Current Affairs, politics, regulation, Scandal
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A friend asks a good question:

What
I’m trying to understand is the immense effort that is going into trying to
maintain the fictional telecom industry and so little effort to enable a real
marketplace.

The answer is very simple.

 
Power.
 
Political power, government power, economic power,  yes.
 
But also taxing power.
 
Because these old networks are heavily taxed,
in many different ways, government and the political classes have become
co-dependent on the telecom and copyright industries.

Conservatives love to quote John Marshall’s aphorism that the power to tax is the power to destroy. But the power to tax also brings with it a duty to defend. Those in the Internet industry first saw this in the Third World 10 years ago, and we laughed at it.

Laugh no more.

 

Haroun
I think it’s vital that we understand how
united the telecom and copyright industries are here, and why it is natural that
the government would ally with them, even against the very idea of progress.
 
By defining content as a service, there are
working business and taxation buckets for old copyright material.
 
When we define networks as mere connectivity,
then copyright becomes water flowing through your hands.
 
All these industries see is the necessity to
them of all water flowing into buckets. But when it flows through hands, it may
become part of a stream, a lake, an ocean, an ecology everyone can drink from.
The oceans of the streams of story, as Rushdie called it.
 
And that’s the problem. Connectivity, as a
principle, seems a direct threat to the property paradigm for both these
industries, and the government.
 
But it’s not, of course. As we’ve seen with
open source software, sharing is a rising tide that lifts all boats. New
business models emerge, and progress is faster than with the old proprietary
model.
 
So the question becomes, how do we get
government to see that the economy will be bigger, even more taxable, by
switching to this open source economic model? Or must we wait for those who  do
embrace it to pass us by?
Tags: Bob FrankstonInternet regulationpolitical philosophytaxationtelecom regulation
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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn began his career as a financial journalist in 1978, began covering technology in 1982, and the Internet in 1985. He started one of the first Internet daily newsletters, the Interactive Age Daily, in 1994. He recently retired from InvestorPlace and lives in Atlanta, GA, preparing for his next great adventure. He's a graduate of Rice University (1977) and Northwestern's Medill School of Journalism (MSJ 1978). He's a native of Massapequa, NY.

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