United Nations to consider tax for Internet giants in the US

By on June 11, 2012, 8:30 AM

Apple, Facebook, Google and Netflix could be among those affected by a leaked Internet tax proposal via the United Nations. The proposal would force large web companies to pay fees to serve non-US residents for consuming bandwidth, potentially limiting their global reach.

The documents reveal that the proposal will go up for debate in December during a meeting of the International Telecommunication Union. The European Telecommunications Network Operators Association (ETNO), a group that represents companies in more than 30 countries, is responsible for drafting the proposal. It would reportedly amend an existing treaty and could additionally allow governments to monitor and restrict Internet access in certain countries.

Telecommunications companies like France Telecom, Telecom Italia, and Vodafone Group have been lobbying for such a treaty for some time. They feel that large content providers should be required to pay a fee linked to consumption of their services to offset the cost of bandwidth on their end.

In response to the leak, the ETNO told CNET that they feel the proposal is innovative and their entire executive board agreed with its adoption. Of course, not everything thinks this is a wise idea.

Cisco vice president for global technology policy Robert Pepper predicts that US Internet services would simply reject foreign traffic rather than pay the potentially costly fees, a move that would result in less revenue for US-based Internet companies and provide fewer multimedia options for people in developing countries.

Tax rates weren’t mentioned in the proposal but experts believe they could reach billion of dollars annually.




User Comments: 17

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davislane1 davislane1 said:

Editing note for end of paragraph 4: " Of course, not everything thinks this is a wise idea." Should be "everyone".

"They feel that large content providers should be required to pay a fee linked to consumption of their services to offset the cost of bandwidth on their end."

In other words, they've tapped out subscribers so now they need to go after someone with more coin.

gwailo247, TechSpot Chancellor, said:

Internet is free in Europe? Damn, why am I paying for it then? I mean, that makes, sense you provide free internet for people, and so in return I suppose you could restrict what they can't and can do because its free, and you're paying for it.

Because this wouldn't make much sense if people were already paying the telco companies to use the internet.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

This is BS, instead of taxing the people that want the service, tax the service. Thats right, blame the service for high bandwidth issues.

Guest said:

"In response to the leak, the ETNO told CNET that they feel the proposal is innovative and their entire executive board agreed with its adoption. Of course, not everything thinks this is a wise idea."

Tax is innovative, since when. Also not surprised the board agreed with this adoption, it directly influences they're revenue. All I see this doing is alienating more people from internet services. Why should a service that's being offered for free be taxed and how do you determine the amount of tax for said service. This is just another step in the wrong direction influence by corporate greed yet again.

gwailo247, TechSpot Chancellor, said:

Why should a service that's being offered for free be taxed and how do you determine the amount of tax for said service. This is just another step in the wrong direction influence by corporate greed yet again.

Because this way they have the content provider pay to show the content to the content consumer, and then they charge the content consumer to watch the content. They basically double their profit. This isn't a tax, this is just using the law to force a private company to pay another private company money.

MilwaukeeMike said:

Ha, it's innovative because govts are always searching for new ways to tax, and this is a new way to tax. They're going to (try to) tax google for providing a free service.

Gwailo, double dipping happens all the time. I pay the govt income tax when I make money, and sales tax when I spend it. I wouldn't br surprised if this ETNO group feels cheated currently.

Trillionsin Trillionsin said:

ultimately will come down to increasing prices to those who pay for the services... right?

Tanstar said:

In what world does the UN get to set taxes for U.S. companies?

Vrmithrax Vrmithrax, TechSpot Paladin, said:

So, using this potential tax as a precedent, what's to stop the US from taxing every person outside of the country who connects to one of those US services? I mean, they are obviously eating up bandwidth on the US connections to the rest of the world too, so why would the sword not cut both ways? Seems like a potential precursor to the internet becoming a true "walled garden" with only heavily monitored toll roads between countries.

It's a pretty slippery slope to start down. Hopefully the UN gets together a group of people to evaluate this idea who actually have a clue how technology and the internet really works, and not just a bunch of accountants or economics majors who think in dollar signs.

Mantrhax Mantrhax said:

time to make an internet out of USA

Guest said:

Smart idea that seems stupid at the same time.

cmbjive said:

In what world does the UN get to set taxes for U.S. companies?

In the same world that gave birth to the UN in the first place.

Guest said:

if I was google id put in a pay here because UN wants money, before displaying search results. there are many free services, that will get impacted by this.

facebook and twitter should aswell. ask costs.

if all 3 ask for money to work then people will go on a rage on the un because of this tax.

free internet services will only remain free if u dont tax the free service!!!!

Guest said:

Not corporate greed. This is all gov't.

Guest said:

This is a way for the EU countries to make money to improve their internal infastructure. Since they can not keep up with the demands they figure make the "US" companies pay a tariff if they want people to access them from the EU. So just another way for the USA to bail out the freaking rest of the world.

I got a idea, how about we go after the rich Oil companies for putting the screws to the entire world period? I mean in a world economy where countries and companies are going under left and right, but rich oil companies are making record revenues. Why are we putting up with such outlandish BS? Why ? because the goverments all are involved in that little money making project!

Guest said:

I think they forgot that the US is one of the permanent UN members with veto power.

TJGeezer said:

I have to agree with one of this thread's many Guests - if Google free services are being "taxed" by some companies for providing free content, Google would be right to put a "pay here" collection gateway on content headed for networks provided and controlled by those companies, to cover Google's costs.

As someone else said, that's a slippery slope to start down. But don't rant against the U.N. for this - blame the greed of the ETNO members, "a group that represents companies in more than 30 countries". Blaming the U.N. or any particular government is like blaming the musicians for the greed of the copyright gamers who control the RIAA. Wrong target, folks.

This particular manifestation of corporate greed is all ETNO's party and they sound downright proud to have come up with such a brand new potential cash cow for those who own the member companies. I seriously doubt the destructiveness of such a move even came into their minds. It's all about who gets richer.

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