Month: December 2014

Title II And The Return of the “Gore Tax.” Or, The Debate We Should Be Having.

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Hal Singer and Robert Litan over at Progressive Policy Institute caused some stir recently with this paper claiming that if the Federal Communications Commission (FCC) reclassifies broadband as a Title II telecommunications service, it will tack on over $15 billion in new state taxes, fees and federal universal service charges. As Free Press already pointed out, (a) Congress extending the Internet Tax Freedom Act (ITFA) in the recent “CRomnibus” funding bill” takes the state tax issue off the table; and (b) even without ITFA, the PPI Report made a lot of questionable assumptions to reach their high number.

 

Update: Senator Ron Wyden (D-OR), one of the drafters of the IFTA extension, has this short but forceful statement about the claims that reclassifying broadband as Title II will allow states to tax broadband access despite IFTA. “Baloney.”

 

Happily, the ITFA extension lets us blow past the debate about whether states even use the FCC definition of “telecommunications” for revenue services (many don’t, see, e.g., this tax letter from Tennessee as an example). We can cut right to the chase on the big thing ITFA doesn’t cover — Universal Service Fund (USF). Here again, I want to blow past the question of the numbers used by PPI (which rely on a set of assumptions that amount to what we call in the trade a SWAG (“scientific wild ass guess”)) and focus on the debate we should be having — do we still believe in Universal Service or not?

 

If we no longer believe in Universal Service as a fundamental principle, fine. Lets own that and end the program. If we do believe in the principle of universal service, and we agree that broadband is the critical communications medium of the 21st Century, it makes no sense to play tax arbitrage games with definitions. The FCC continues to play silly, complicated games with the Connect America Fund (CAF) because everyone wants to redirect USF support to broadband but nobody wants to include broadband in the contribution base. As a result, an increasingly smaller base of voice services is supporting an increasingly larger set of overall services. This makes no sense and is inherently unsustainable.

 

As I explain below, this isn’t the first time we’ve debated the importance of universal service and whether we care enough about it to pay for it. Nor will reclassification trigger some sort of “sticker shock,” as the PPI paper suggests. Instead, as I explain below, reclassification is the prelude to the real debate we need to have on whether we still believe in the fundamental principle of service to all Americans, or not.

 

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Art?

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I continue to find myself thinking about this photo shoot. There is something compelling such thought, and so I feel that one way to think about it is as art.

There are technical issues that can be thought of in artistic terms. For example, I seem to be upset about the variations of paint schemes. I like my aerospace to be engineered. Isn’t there A Right Answer(TM)? How can there be several best paint schemes? (I have the same objection to BMW’s line about “We only make one thing: the Ultimate Driving Machine.”) And yet my favorite paintings are not photographic. If “too perfect”, I would be instantly distracted by whether or not the display was Photoshopped or Computer Generated. But how can one create a Wabi-Sabi esthetic on an aircraft? Maybe the answer is variations.

Hmm. Not satisfying. If the variations were created as deliberate imperfection, I think a much better choice would be to have an artist deliberately create visual asperity in the same way that game artists make a flat glass screen look like rough and rugged material.

Maybe the variation is symbolic? After all, Airbus is uniquely a product of multiple countries. Maybe the variation gives one a feel for laborers of many countries coming together to put these great birds in the air.  Indeed, the making-of film does give a sense of this. Hmm, again, I think other designs could have achieved that better.

Another consequence of an artistic perspective is that it gives a lot of room for the enormous sums of money. How much is art worth? There is something stirring about the site of these planes, so who am I to say they did it wrong in some way? How much did this shot cost, and how much is it worth?

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Billion Dollar Program Management

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1.5billion-dollars
This picture is from petapixel. I’m still trying to wrap my head around this.
The cost of this photo shoot (fuel, chase planes, pilots, etc.) is estimated north of $75k.
The planes themselves are $300M each, or $1.5B for the five. BILLION.
But of the five planes, there are at least four different paint schemes. This is pre-release of the plane.
Think of of the direct cost to produce a new paint scheme for one of these, and the implications on schedule and coordination (e.g., getting the five planes in the same place at the same time with the paint dry), and that nonetheless, some number of project/program-managers approved the changes. Nay, demanded the changes.
  • If it was right to do so, there is a staggering amount of costs at stake, for what most engineers would mistakenly think is silly.  (Heck, I thought it was wrong. But I’m not sure I was right!)
  • If it was wrong to do so, there is a staggering amount of money and time being mis-applied.
Am I nuts to wonder about such things? Have I been too long at startups, where all I can think of is what it takes to get it out the door and not muck with the schedule and the dependencies?
(I’ll promise to post more with some reflection, respecting what people have already shared with me out-of-band.)