I've seen quite a lot of discussion recently about proposed new taxation of connectivity.
This is an unavoidable outcome of the application layer becoming disconnected from the connectivity layer. Regulation at the application level will die because it creates an economic disincentive to itself. The applications just move to another jurisdiction.
So we'll see communications taxation re-emerge as a tax on Internet access and ISP service, until such time as mesh networking takes off and people arrange their own network connectivity.
The missing wildcard is identity. As I've mentioned before, a byproduct of a connectivity or service provision relationship is digital identity collateral. Without such collateral, the policing of abuse becomes hard.
How does this work? The provider can do harm to you if you do harm to others: they can tell the police where you live, who you are, what your bank account or credit card number is; or just simply cut off your device or service. "Free" connectivity (as in "beer" and "speech") doesn't provide this by default.
To date, you have to go to a centralised entity to obtain the collateral-backed identity that makes interruptive services socially scale. I would therefore expect to see taxes move from voice service provision to the issuance of telephone numbers and even domain names. Why? Because of the difficulty of building decentralised identity systems that enbed identity collateral.
The whole debate about "taxing VoIP" is a misnomer, because IP unbundles the elements of PSTN voice service. The real debate is about what those bundled elements are (I'm at about 20 and counting!), and which (if any) should be taxed and regulated.
UPDATE: Check out Aswath's comment below. Also, how on earth do you tax access network connectivity once you have choices beyond dial-up? No really ... how do you do it? If it's a standard sales tax, no problem. But if you want to "supertax" connectivity, you have to define it. Does it only apply to "Internet access", to avoid tolling LANs? What factor to you vary your tax on -- just downstream bandwidth? Where does the "Internet" bit start if you put together a more ad-hoc network? How do you align jurisdiction with network architecture? It's a nightmare!
Posted by Martin Geddes at 2:48 PMTrackBack URL for this entry:
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