Obama wants to wring fat dollar from mobile operators
Drove my Chevy to the ($4.8bn) levy
President Obama has proposed squeezing $4.8bn out of the mobile network operators with a levy on the spectrum for which they have already paid, or thought they had.
The levy starts at $50m in 2009, rising to $200m in 2010 and eventually hitting $550m a year per company - raising $4.8bn over the next decade, which could go some way towards addressing America's $1.7trn budget deficit.
The information is slipped in on page 132 of the President's budget under the line item "Spectrum license user fee", as spotted by Reuters, and will certainly require Congressional approval as well as a government ready to fight the inevitable legal challenges the network operators would be remiss not to mount against such flagrant exploitation.
Not that one can blame Obama - more money has to come from somewhere, and mobile network operators are one of the few groups who are doing OK in the current economy, not to mention being monolithic companies who engender little in the way of public sympathy. But the long-term subscriptions that have served to protect network operators from the economic freefall will be up for renewal soon, and it seems unlikely the industry is going to hand over just shy of $5bn without a fight.
We'll get more details of the proposal in the spring, and the operators aren't commenting yet, but you can be sure their lawyers are pleased to see their services will continue to be in demand throughout such turbulent times. ®
Re: Not that one can blame Obama - more money has to come from somewhere
Absolutely not true. I can blame him, and intend to do so loudly at every opportunity for at least the next four years. If he and his socialist buddies hadn't passed a porker that in one month explodes the deficit more than Bush did in 8 years, he wouldn't have to collect the money. There is almost no stimulus in the so called stimulus bill.
If you want to restart the economy, the only proved way to do so is the method used by John F. Kennedy and Ronald W. Reagan: Cut taxes across the board. And no, transfer payments from people paying taxes to people not paying taxes don't count. It worked in the 80's; it will work again if tried.
He's right to go after these guys as a source of money. They're greedy. They practically have a license to print money with some of the fees they charge.
Of course, to combat this, all they'll do is raise their fees.
If one operator takes that extra fee hit and DOESN't pass it on, they will gain a lot of business from people who move providers.
But, of course, you'd rather have your Prez print some more money and devalue the dollar so you end up buying bread for $2mil in $100 notes stacked in a wheelbarrow.
Governments have fairly limited ways of making money. If they ask for more business tax, companies pass that on to you, if they charge companies more for things, companies pass that onto you.
If governments spend less money anyone working for the gov (or anyone working for a company that has a government department as a client) get less/redundant. That'll be a lot of 'you' too.
Capitalism ROCKS. You could always set up a PayPal "Donate" button on whitehouse.gov and see if the 20% that hold 85%* of the wealth will help out the cause. G'luck with that one ;)
* Circa 2005 - http://sociology.ucsc.edu/whorulesamerica/power/wealth.html