<div dir="ltr"><div class="gmail_default" style="font-family:verdana,sans-serif">Winthrop Yu asked a fair question about my comment in a previous thread </div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex">
... "Sender pays" is anti-consumer in developed countries but _possibly_<br> appropriate in poor ones. ...<br></blockquote><br> How _possibly_ so?<div><br><div class="gmail_default" style="font-family:verdana,sans-serif">
Forgive the length of my response, but these are important issues for some of the poorest countries in the world. A brilliant and well-financed persuader, U.S. lawyer-lobbyist David Gross, created a straw man for the debate on this at WCIT and obscured important issues.<br>
</div><div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> <b>I'm still inclined against it</b>, which is why I said "possibly." However, a reasonable case can be made that many poorer countries would be well served by a border tax on bits.</div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> I've been fighting Verizon, Deutsche Telekom and the likely with passion on this since before Tim Wu coined the term Net Neutrality. It's just a rakeoff by powerful carriers to the detriment of consumers. But nearly every nation in Africa took the attitude they should be able to collect on incoming traffic, so I looked more deeply at the issues there. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> It's enormously disrespectful for Western experts, typically financed by a handful of giant companies who want a free hand, to presume we know what's best for Africa. That's "White Man's Burden" thinking and diminishes those who take that attitude. In most cases, the Africans - many of them truly expert, several holding U.S. PhD's - understand their needs better. The Africans I met at WCIT were delighted to discuss the issues and learn and I learned from them in turn. The Americans lobbying on this came across of uninformed. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> Turns out it's tricky when you get into the details of where the money goes. In a developed country, the amounts involved are small and there are plenty of other ways to serve social purposes. I've long been a strong supporter of net neutrality and opposed carriers imposing a charge on incoming traffic. People on this list know why that's likely to be a negative thing. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> When we're dealing with poor countries however, several factors come in that are very minor in the U.S. or Germany. They may be important enough that a (moderate) tax on incoming Internet traffic is the right national policy. Raising revenue in Africa through a (moderate) tax on traffic may be the only way to prevent the massive tax evasion of the giant Internet companies, of strengthening the negotiating position with the undersea cable cartels, and of replacing the loss of foreign exchange from carrier VOIP replacing PSTN calls. If you follow the money on that, you see a windfall gain for the likes of AT&T and a loss of revenue for say Cameroon. (And also consumer benefits, of course)</div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> The million dollar silver tongue promoted the idea that if Africa imposed any charge, universities and Google would cut them off from education and other benefits of the net. That's certainly possible, but wildly implausible at the levels people are discussing. It only makes sense if the charge were far higher than anyone I knew was proposing. But that was so obscured many well-meaning people believed the spin. Brilliant work on David's part. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> <i>Despite the high cost of transit to Africa, no one is cutting them off. So if the tax is established at fraction of the transit costs, the feared consequences are highly unlikely at best - no matter how many folks Google inspires to say otherwise.</i></div>
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Some of the problems the Africans and Arabs wanted to address are possibly ill-served by this method, but they don't see better choices. </div><div class="gmail_default" style="font-family:verdana,sans-serif"><br></div>
<div class="gmail_default" style="font-family:verdana,sans-serif"> One problem is the practical ability of the Internet giants to avoid paying taxes. Google and Apple are under attack in England and much of Europe of using tax havens and loopholes to pay little or no tax. (See the British newspapers.) ISOC is certainly not in favor of tax-dodging. My belief is that the United Kingdom and the EU have plenty of other levers to collect a fair share of taxes from Google. But Ghana probably doesn't; the only way for Ghana to collect the amount of a fair tax on ad sales in Ghana is to impose it domestically. Otherwise, in practice, the an ad for Proctor and Gamble shampoo to sell in Ghana will be handled by a Belgian ad agency paying an Irish subsidiary of Google. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> A second problem, probably involving more dollars, is the net effect of bypassing the PSTN is a transfer of income from the poorer countries to companies and individuals in the richer ones. Most Africans believe strongly that the loss of foreign exchange from VOIP replacing voice calls, etc. is too much of a blow to their economy to be acceptable. In many poor African countries, that 20 cents a minute adds up to an appreciable part of their annual hard currency earnings. Especially because in many cases, and certainly in the short term, most of the reduction from bypassing the PSTN with VOIP by telcos in the developed world sending traffic accrues to the company, not the consumer. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> A third issue is the very high cost of transit because in many places the 1-3 fiber networks have enough power to demand cartel-like prices. That's not true everywhere but is very common. Since the transit cartel would also be hurt if traffic diminishes, they have incentive to lower their rates to prevent it. So some of the net cost of the "border tax" would be borne by folks like France Telecom and other cable owners, usually quite profitable. </div>
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<br></div><div class="gmail_default" style="font-family:verdana,sans-serif"> In much of Africa, it's very difficult to collect taxes. There's certainly no way to raise locally foreign exchange, desperately needed for oil, technology, and medicine. (And yes, I know some goes to bank accounts in Switzerland.) So the very few hard currency source of dollars become crucial. The loss of the phone charges is very harmful to some of these economies. It's a substantial fraction of the annual foreign exchange earnings. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_extra"><div class="gmail_quote"><div><div class="gmail_default" style="font-family:verdana,sans-serif"> As I said, to my best understanding this tax on the Internet isn't worth it. But the arguents the Africans make deserve respect. </div>
<div class="gmail_default" style="font-family:verdana,sans-serif"><br></div><div class="gmail_default" style="font-family:verdana,sans-serif">Dave Burstein</div><br></div><div><br></div><div> </div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex">
On 11/18/2013 2:01 AM, Dave Burstein wrote:<br>
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...<div class="gmail_default" style="font-family:verdana,sans-serif;display:inline"></div></blockquote>
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