This letter and a response appeared February 19 2004 in NewsScan Daily. The subject under discussion was whether adding new taxes to Internet usage was fair and logical in light of the decreasing tax revenue stream coming from the traditional telephone sector. For the record, i am generally opposed to any new tax, and believe that we are already taxed too heavily, which results in a slowing down of the economy.
NewsScan Daily – A Summary of Technology-Related News
Sponsored by RLG And Written by John Gehl & Suzanne Douglas
February 19, 2004
IT’S ALL DATA, IT’S ALL GOOD
Michael Bell’s comment of the difference between voice and data in his Mailbag contribution ("If It Sings, It’s Opera") fails to look at the bigger picture. What about "data" that has been created using a speech to text program such as Dragon’s Naturally Speaking or IBM’s Via Voice. Voice or data? What if I have my email client set up to "read" my email to me." Voice or data? What if I have a voicemail system that sends a WAV file attachment to my email inbox, and by clicking on the attachment, I can hear my voice message on the computer’s speakers. The voice mail call came in on the telephone, but the message was delivered by email. Voice or data? What about the likelihood that before long we will not be using the GUI and a keyboard and mouse for data entry, but instead a VUI — a Voice User Interface.
At the beginning of the automobile age, there were inane attempts to try to squeeze the automobile in to existing horse travel paradigm. There used to be a law somewhere that an automobile needed to have a flagman walking on foot ahead of the vehicle to alert people on horseback or in wagons of the automobile’s approach. Kind of defeats the purpose of having an automobile. We seem to be similarly plagued with wrongheaded ideas about how to regulate and tax data services.
Once voice is converted into packets for transport via the Internet, they are no longer "voice" — they are data packets, period, end of story. The telephone networks themselves have been converting analog telephone signals into data packets for communication between phone company central offices via ATM for over a decade. Now phone companies like Sprint and Qwest and several others have announced their intention to begin the conversion process to Voice over IP. This is simply because packet switching is a vastly less expensive way than circuit switching to move a voice conversation around. The only thing preventing it from happening right this minute is the vast multi-billion dollar investment the phone companies have in circuit switching technologies.
Today, if the communication occurs on the circuit switched telephone network it is regulated and taxed as a telephone call. This includes DIAL UP MODEM access to the Internet. If the communication flows in across a packet switched network like the Internet, or a Frame Relay network, or oven a data private line network, it is not regulated and taxed as a telephone call. This means large companies using their own private data networks to move voice traffic around using technology like the Cisco or Avaya Voice over IP phone systems are also not regulated and taxed as a telephone call. Using this kind of system, I can place a call from my office in St Paul, Minnesota to Paris, France using my company’s data connection to my Paris office, and have my phone call appear to be a local Paris phone call. This cuts out the local phone company at my end, and the long distance carrier, from the call. Is it voice or data?
Going back to my automobile analogy, what we have now is like an automobile with a horse tied to the back. I use the automobile everywhere it is capable of taking me, and when it gets stuck, I ride the horse. Eventually, my automobile will improve, my horse will die, and I will not replace the horse.
And besides that — what in the world are we doing trying to create more regulations and taxes!!. The federal excise tax on telephone service was instituted at the turn of the 19th century to pay for the Spanish American War! Does anyone think we might have paid that off? The tax is still here. The only thing in this life approaching eternity is taxation. No Internet taxes please..
I am sure there will be no way to prevent regulation and taxation in the long run, but let’s get beyond the "is it voice or is it data" issue. If it’s on a packet-switched network, its all data. (Bob Weiss, MCSE)
And a response
I thank Bob Weiss (Re: "It’s All Data, It’s All Good") for his technology lesson. Being an MCSE, being able to give such a detailed explanation will certainly warm Bill Gates’ heart. However, Bob’s arguments are just the poison to put in the pill. As he says, the big boys have the power to call Paris without paying for it (he’ll say that they paid for it by building the VoIP network). So, when the Tax guys see that the "traditional" tax sources are drying up, yet the calls have increased, it won’t be long before IF IT’S ALL DATA, IT’S ALL TAXABLE! (It’s a duck, Bob. It’s a duck!) (Michael H. Bell)