Dan Zarrella's blog

Defend the Internet from Innovation Taxation

Posted by Dan Zarrella
Fri, 2008-06-13 15:12

The web is the driving power behind the most important innovations in modern human history. Never before has the rate of technological progress been this fast and this promising. The barriers of entry for small businesses and entrepreneurs are lowering and many markets are becoming faster and more open.

We should be empowering individuals and small businesses to take advantage of these opportunities to the greatest possible extent, not burdening innovation with taxes. We should be accelerating the natural trends and keep lowering those barriers to allow more driven people to follow their own American dream on the web, not making it harder and more expensive.

Introducing taxes now will severely cripple the web's growth at this critical stage of development, and endanger America's ability to stay competitive in the electronic market.

Most of the pro-tax talk has centered around ISP access taxes, which would be a tax service providers would be charged and then pass on to consumers. Access taxation could come in a number of forms and advocates have mentioned a few specific ways; including a metered bandwidth tax that would apply on a scale according to the speed of your connection, and an email tax proposed by the UN to redistribute the world's wealth.

Individual states (like New York) have also begun attempting to impose sales tax on web-based retailers that do not even have physical presences in those states. This would be a huge barrier to mom-and-pop e-commerce businesses that will have to be laden on additional accounting costs to process the complicated multi-state tax requirements.

The internet has been mostly safe from federal access taxation since its inception, and President Bush extended a moratorium on it until 2014, but now with pro-tax politicians in control of Congress,the political dynamic appears to have shifted in favor of internet taxation and their allies on Capitol Hill.

The next President must be committed to making the federal ban on internet access taxation permanent and state governments must be held accountable for their attempts to impose innovation taxation.

These taxes will endanger innovation on the web and will hobble the future for individual users and small businesses. Please join the fight to defend the internet, by signing the petition at NoInternetTaxation.org.

So far we have over 800 signees including David All (founder of this site and SlateCard), and the list just keeps growing. We've also made a Facebook app to make signing the petition and passing it on to your friends via Facebook as easy as possible.

Online Free Markets Must be Defended

Posted by Dan Zarrella
Thu, 2008-03-13 16:57

Underlying most arguments against the free market is a lack of belief in freedom itself. -Milton Friedman

 

In modern America, truly free markets can be hard to find, and like endangered national resources they must be protected from the regulation-happy enemies of capitalism. Especially in emerging industries we must act to preserve competition and the invisible hand.

 

It may seem counter-intuitive then that I support the defense of internet content, commerce and service providers from the anti-competitive broadband providers, but bear with me for a moment as I explain my position.

In most markets (particularly non-urban areas) there exists a duopoly of broadband internet service providers, most folks have to choose only from either the phone company or the cable company and the offerings are generally not very different.

In the old days of dial-up everyone had a plethora of options to pick from, the market was healthy and the competition benefited the consumer. If one company was providing sub par service the market would correct it. But we must remember the current state of high speed internet access is that real competition does not exist and the free market cannot correct itself.

Because of this anti-competitive environment ISPs are able to endanger consumer choice (and the self-correcting nature of capitalism) by degrading their customer's access to services they offer competing version of. If your ISP offers VOIP or video they are able to coercively remove competition by slowing down or even entirely blocking access to other providers, like Skype or YouTube.

There is already evidence that Comcast has blocked access to certain high-quality video providers, possibly in an effort to eliminate consumer choice in that industry, and we can be sure that more market-squashing like this is in the works from the telecom giant.

As if to drive their anti-populust message home even further Comcast interfered with the democratic process recently when they paid uninterested people to "fill up seats" in an open FCC hearing in Massachusetts on these issues, preventing their critics from even attending the meeting. When questioned on the tactic they admitted to using "seat warmers" to stifle debate.


These sorts of anti-democratic and anti-competitive actions must be stopped before they can endanger emerging free markets and the free speech of citizens.


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