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Author Topic: Americans Taxed $400 Billion For Fiber Optic Internet That Doesn’t Exist  (Read 51 times)
Hydrogen
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May 14, 2018, 10:37:20 PM
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Americans Paid $400 Billion in Taxes & Internet Surcharges for Fiber Optic Upgrades that Never Came

South Korea is the poster child for high-speed internet: its fixed-connection and mobile download speeds are consistently among the fastest in the world, and its capital city, Seoul, is completely saturated with Wi-Fi.  How did they do it?

Being densely populated helped: it’s easier and cheaper to wire-up crowded cities than empty countrysides.  But the key element was the government’s pro-broadband policies.  Not only did they open up the market for competition among internet service providers, but they also invested in hard infrastructure.

Back in 2011 the New York Times reported that the South Korean planned investments of $24.6 billion in digital infrastructure.  It paid off: South Korea’s internet remains among the world’s fastest, according to testing done by Speedtest—and this is in spite of massive recent gains and investments made by other countries.

Meanwhile, America’s internet connections are slow.  This summer Forbes Magazine reported:

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The US ranks 9th in the world in fixed broadband speed at 70.75 Mbps average download and 27.64 Mbps average upload. Ranking in the top ten is good but the US’s average download speed is less than half top-ranked Singapore’s 154.38 Mbps. Both upload and download speeds increased steadily from July 2016 to July 2017 and the US’s rank increased from 11 to 9.

The picture for the US is not nearly as good when you look at mobile internet speed where the US ranks 46th, just ahead of Albania and behind Oman. Average download speed in the US is 23.05 Mbps which is less than half the average download speeds in Norway, the Netherlands and Hungary. Average upload speed in the US is 8.26 Mbps. While mobile download speed increased by almost 20% from July 2016 to July 2017, the US’s world ranking fell from 44th to 46th. Not good.

Since then America’s fallen down to 11th place in terms of fixed connection download speed, and 47th in terms of mobile download speed.  Basically, America’s internet is slow, and it’s getting relatively slower.  This will have big economic consequences down the road as the world grows increasingly digital.

But that’s not the real story here.  More important is America’s failure to keep pace with countries like South Korea despite absolutely astronomical investments in broadband technology.

According to a fairly recent book (2015) called The Book of Broken Promises, the American people have been charged some $400 billion by telecom companies (at the insistence of government) for fiber optic upgrades that have not materialized.  The author writes:

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By the end of 2014, America will have been charged about $400 billion by the local phone incumbents, Verizon, AT&T and CenturyLink, for a fiber optic future that never showed up. And though it varies by state, counting the taxes, fees and surcharges that you have paid every month (many of these fees are actually revenues to the company or taxes on the company that you paid), it comes to about $4000-$5000.00 per household from 1992-2014, and that’s the low number.

You were also charged about nine times to wire the schools and libraries via state and federal plans designed to help the phone and cable companies.

And if that doesn’t bother you, by year-end of 2010, and based on the commitments made by the phone companies in their press statements, filings on the state and federal level, and the state-based ‘alternative regulation’ plans that were put in place to charge you for broadband upgrades of the telephone company wire in your home, business, as well as the schools and libraries — America, should have been the world’s first fully fibered, leading edge broadband nation.

In fact, in 1992, the speed of broadband, as detailed in state laws, was 45 Mbps in both directions — by 2014, all of us should have been enjoying gigabit speeds (1000 Mbps).

Of course, this didn’t happen.  America has relatively slow internet, and just a 9.4 percent penetration rate for fiber optic cables, according to Business Insider—this is less than half the OECD average.

The Trump administration would be wise to make improving America’s digital infrastructure a priority.  The South Korean model, market liberalizations combined with hard investments, could be a viable model.

https://nationaleconomicseditorial.com/2017/11/27/americans-fiber-optic-internet/

Perhaps one key area where the united states is in dire need of tax reform.   Smiley

Unfortunately telecom taxes (and many other forms of taxation) are redistributed towards war in the middle east or other dubious programs. Taxes often do not fund the things for which they are collected. As a result infrastructure and maintenance of many key essentials people rely on may be significantly underfunded. An example of this may be the levees which broke during hurricane katrina causing a flooded new orleans. Funding being cut to levee upkeep and maintenance is one aspect of that story.

Anyways, hopefully this raises awareness, lends people a different perspective on raising taxes and tax reform in general. I think we can all agree spending needs to be brought under control. More of an effort needs to be made to cut down on enterprises like the iran deal which seemingly was given billions of dollars to help it develop nuclear weapons at a faster rate, in order to destabilize the middle east further, in order to suit a political agenda. A similar deal was worked out between Bill Clinton's administration and north korea decades ago where NK was given billions of dollars and two reactors, which helped it to develop nukes faster than they otherwise would have.

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May 15, 2018, 06:29:24 AM
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400 billion USD in an insane number.All the electricity consumed by the USA for one year costs less then 400 billion.Imagine if all that money was invested in crypto mining and green electricity production.
Imagine if we could create a decentralized blockchain based internet,so the people won`t have pay  the big monopolies ,like Veirzon and AT&T.
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May 15, 2018, 06:39:29 AM
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OP, I am just trying to figure out how this has anything to do with Bitcoin? Could you edit your post and add the relevance to Bitcoin?

Two possible links, could be :

1. Bitcoin users and possibly new users are being disadvantaged, because infrastructure that could have been used to "link" people with internet are used to fund wars?

2. The USA are not using their tax money correctly and Bitcoin can be used to make this process more transparent? The public will be able to follow the money, if it was linked to the Blockchain?

Let us know, what angle this discussion must take on this.  Wink

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May 15, 2018, 09:37:54 PM
Last edit: May 15, 2018, 09:52:30 PM by Hydrogen
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OP, I am just trying to figure out how this has anything to do with Bitcoin?

Its been said one of the reasons for high bitcoin demand is lack of confidence in governments and elected officials. People lose faith in governments printing excess money while being burdened under massive deficit and debt and seek safer, more reliable alternatives, to store their wealth. If the article in OP illustrates reasons people should not trust government fiat, it could benefit bitcoin and rightfully increase the value of crypto.

Some believe bitcoin should be regulated. They say heavy taxes on bitcoin will create positive tangible benefits in the economy or elsewhere. This could serve as an example of how a government could conceivably tax bitcoin (or something else) $400 billion dollars and fail to provide promised benefits. If this represents our status quo rather than an isolated incident, it could be better for bitcoin to be taxed @ a low rate and be deregulated(as many nations adopting crypto are currently doing).

This is in favor of bitcoin and crypto being taxed @ low rates and hopefully serves as an example of how blindly relying on governments or regulation to fix our problems and save us from evil, isn't necessarily the best option available.

It could reveal flaws in centralized government and lends support to governments which are more decentralized within an abstract where there is enough competition for large scale budgetary bloat and waste to be reduced(if possible).

I don't want to tell people what to think or believe & would prefer if they drew their own conclusions(hence vague posts).

Even if there are no crypto implications, it could still serve a purpose. We might say the more informed and educated people are the better equipped they are able to make good decisions and support the things which are best for them, their friends and families. The better the decisions people make, the better off crypto and bitcoin are. Any post that is somewhat informative and educational could have value to crypto hodlers as it could allow people to know more and make more educated decisions, et al.

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May 15, 2018, 11:07:43 PM
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400 billion USD in an insane number.All the electricity consumed by the USA for one year costs less then 400 billion.Imagine if all that money was invested in crypto mining and green electricity production.
Imagine if we could create a decentralized blockchain based internet,so the people won`t have pay  the big monopolies ,like Veirzon and AT&T.
We should ask ourselves where does all these money go in the first place, The government should be able to account to the people because this seems like a fraudulent case to me.

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May 16, 2018, 11:51:52 PM
Last edit: May 17, 2018, 12:02:51 AM by Hydrogen
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We should ask ourselves where does all these money go in the first place, The government should be able to account to the people because this seems like a fraudulent case to me.

It might be fraudulent but it is a standard practice for the US government.

Another example where this happens is social security. For sake of discussion let's say that social security liabilities are $1 trillion(this is a random made up number btw, uncertain what the real numbers are). If the US government collects $1.2 trillion in social security taxes, they always spend the excess $0.2 trillion on things that have nothing to do with social security. This is why social security is known to post "negative returns"(as a program it pays negative interest). If a person invests $400,000 into social security during their lifetime, they might only receive $200,000 back. Its due to the federal government spending the excess on an assortment of other things for a period of time spanning decades.

It should be mentioned there is something known as a "social security surplus". The title fools people into believing that the government holds taxes collected for social security in trust. The "ss surplus" is a collection of US treasury bonds held in an effort to back the program similar to how gold once backed fiat currencies. It is not a real surplus the way people might expect.

A lot of people know this and are aware of this but its not a topic that is often discussed. Definitely not a topic likely to come up in school or university classrooms. The only views a student is likely to come into contact with are pro socialist or pro big government perspectives. It is dangerous, many state run programs like social security will inevitably fail due to them being unsustainable via method of implementation. Details of why these programs are unsustainable are seldom if ever mentioned & there is little discussion on it. All of which are crucial if problems society faces are ever to be addressed and issues like deficit and debt are ever to be reformed in a way that is effective.

People assume governments make good decisions and can be trusted to responsibly and intelligently manage things like fiat currencies. Perhaps that view should be questioned and there is a real potential for things like crypto currencies to handle money better than institutions like banks or governments can. So there could be a potential tie in for bitcoin as well as far as these types of issues go.

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May 17, 2018, 03:40:06 AM
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We should ask ourselves where does all these money go in the first place, The government should be able to account to the people because this seems like a fraudulent case to me.

It might be fraudulent but it is a standard practice for the US government.
We all know that the mentioned figure realized from that taxation is very high. It would have caused pains to those Americans who paid. With that figure out some may be reluctant to pay anymore. But why can't US stop its needless wars. Acting the world police as it suits them is not healthy.

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May 17, 2018, 03:56:20 AM
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The US defense budget surely needs filling up again lol. They have been doing that post World War II by making the IRS more efficient in collecting taxes, increasing taxes and doing things like whats shown in that news article.

North Korea should take the olive branch now before its too late lol.

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May 17, 2018, 06:35:22 PM
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Reading through the Op makes me laugh and conclude that when people don't have anything to fight over again, they go about creating statistics and draw people attention to things ordinarily would have allowed pass without raising any form of high brow. And also the article heading is a little bit sentimental because it claims that Americans paid for what they didn't get going down memory lane from 1992 to 2014 but in the body of the article talks about not that they didn't get it, but it was not fast enough.

It went further to compare the speed of internet in America with other countries by focusing more on the amount Americans pay without considering the amount paid in those other countries that are better and conclude that Americans are being ripped off. The ones the Americans have, I am sure some other countries are paying more than that to have access to the internet yet they cannot even protest or argue with what they have.

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