Why Net Neutrality Matters to Arkansas (Commentary)

The subject of “net neutrality” may make you want to turn and walk the other way, but this hotly debated issue is vitally important to rural Arkansas’ future.

It’s probably as important a growth factor to our state as highways and roads.

Force yourself to read this article and you’ll see what I mean.

The Internet has grown at an unprecedented rate. We do things over fiber optic cable that nobody could have imagined 20 years ago.

Beyond e-mail, retail, music and news, companies monitor inventories and sales in real time, organizations manage memberships, groundskeepers control water use and homeowners set lighting patterns.

The Internet has become the most prevalent overall means of communication on the planet.

And this excludes the explosive growth in the transmission of video content (movies, TV shows, animated shorts, slide shows) over the Web.

Cisco Systems predicts that Internet traffic in North America alone will increase by 264 percent by 2011, to more than 7.8 million terabytes.

Billions of dollars will have to be invested in Internet infrastructure over the next decade.

The sheer volume of information flowing already has begun to cripple the network. If something isn’t done, the Internet will cease to function effectively.

All the major participants realize this. There is no serious disagreement here. The debate on net neutrality can be boiled down to two questions: Who will pay for the upgrading of this critical infrastructure and will Internet service providers be allowed to manage the flow of information to maximize efficiency?

Google, Amazon and eBay, for instance, are pushing for net neutrality.

Their business models, their ways of doing business, have benefited greatly from the structure of the Internet that emerged since 1996.

This structure arose mostly by happenstance and was not the result of any grand vision.

On the other hand, the Internet service providers that supply bandwidth – cable and telecommunications companies – want to see high-speed Internet access spread to as many users as possible. Their business models are based on providing service to the widest universe.

While the phrase “net neutrality” was crafted to conjure up notions of equality and fairness, the bottom line is that if Google and crew get their way, individual customers would soon see their monthly broadband access bills jump in order to finance the enormous investments needed to keep the Internet running smoothly.

There are already significant barriers to providing high-speed access to rural Arkansas.

Net neutrality will raise these hurdles even higher.

Arkansans already struggling to remain competitive in the global economy will face an even steeper climb.

Arkansas businesses will inevitably be saddled with a higher cost structure than competitors in more concentrated urban areas.

Our state will be greatly affected by the outcome of the debate over net neutrality.

We need to secure high-speed Internet access for more Arkansans, in more diverse communities, both rural and urban.

And we must keep costs down so that Arkansas businesses don’t face higher hurdles for success than enterprises in other states.

Go to www.aropportunity.org for more information, and find out how you can help Arkansas compete in tomorrow’s economy.

 

Jim Dailey, the former mayor of Little Rock, chairs Arkansans for Economic Opportunity. He was recently named by Gov. Mike Beebe to the Connect Arkansas Commission.

 

 

AMT: Any More Taxation?

 

Unless Congress passes a “patch” – and soon – the alternative minimum tax could affect more than a third of all taxpayers – some 50 million households.

It is only one item in a long list that makes for Congress’ low esteem among Americans. The latest approval rating for that governing body is only 11 percent. Even President Bush boasts a higher approval rating than that.

The AMT is not an issue that has suddenly popped up on a surprised Congress. They’ve known about it for years but find it difficult to agree on a yearly fix, much less a permanent solution.

Treasury Secretary Henry Paulson last week told the lawmakers that if the AMT is unchanged by the end of the year, 25 million households would pay an average of $2,000 in additional federal income tax. And unless the AMT is altered by mid-November, the IRS will not have enough time to reprogram its computers and rewrite its instruction kits, which would result in taxpayers facing delays in processing of their returns and payment of their refunds.

Both Republicans and Democrats have vowed to fix the AMT over the years but nothing has come of it – the same fate as other legislation that might actually help a majority of the people.

The AMT was originally passed in 1969 to make sure the super-wealthy couldn’t avoid paying any taxes at all through various loopholes.

But the AMT was not indexed to inflation and with recent tax cuts, an increasing number of middle-income taxpayers have been finding themselves subject to this tax. Fortunately, Congress has somehow managed to approve a “patch” each year to keep that from happening.

Considering the income of the average reader of the Northwest Arkansas Business Journal, we suspect many are already paying the AMT.

However, there are many lower-income and middle-income taxpayers who depend on a refund and will struggle without it.

The Treasury Department says $75 billion in tax refunds could be delayed for many weeks if Congress fails to act in time.

Without the patch, a single taxpayer with two young children in day care and annual wages of $50,000 would have to pay $225 in federal income taxes, according to the IRS. With the patch, the taxpayer would get a refund of $964.

This is no time for party games. Congress needs to repair it, replace it or repeal it.

And the sooner the better.