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Another Big Tech Crony Free Ride That Needs to End
Big Tech is titanically huge. Behold some market caps….
Microsoft: $2.29 trillion
Alphabet (Google/YouTube): $1.85 trillion
Amazon: $1.62 trillion
Facebook: $1.01 trillion
And Big Tech uses its hugeness to purchase metric tons of crony government policy. Behold some 2019-2020 federal lobbying and contribution tallies….
Alphabet (Google/YouTube): $49.06 million
Amazon: $48.31 million
Facebook: $44.36 million
Microsoft: $40.79 million
That is a monstrous amount of money in DC - even by corrupt DC’s corrupt standards. But it is a tiny pittance to these monstrous corporate monstrosities. Pocket change from the world’s deepest pockets.
Should Big Tech ever not get all the crony policy they want? They have metric tons of additional money they can pour upon the problem.
The policy dynamic Big Tech’s crony dominance has developed is patently absurd. Big Tech is totally absolved from all sorts of very expensive government programs - and VERY expensive private sector investments. Thanks to some very stupid, VERY crony government policy.
We’ve much discussed lots of crony policies Big Tech purchases. To revisit but one….
How Did Big Tech Get So Big? Massive Government Cronyism:
“Net Neutrality is a stupidly huge government imposition in the Internet – specifically on the ISPs. A whole host of regulations restricting just about everything (Internet Service Providers) ISPs do to provide us service.
“ISPs ask governments – to leave them alone with this Net Neutrality nonsense.
“Big Tech demands government impose Net Neutrality – because it guarantees them huge government-mandated benefits.
“To name but one:
“As mentioned, Big Tech consumes way more than half of all US bandwidth. Net Neutrality – mandates they not be charged any money for any of it.
“We the Little People would pay MUCH more for our service – to subsidize the likes of Apple, Amazon and Google.
“Net Neutrality is massive government regulation – to impose massive Big Tech cronyism.”
Why do ISPs - and us - get the short end of the government stick? Because ISPs are so much smaller than Big Tech.
Comcast: $272.68 billion
Verizon: $229.86 billion
AT&T: $196.85 billion
Charter: $145.97 billion
So ISPs can’t fend off the Big Government cronyism Big Tech buys.
Here’s another Big Tech crony benefit - which we haven’t addressed in more than a little while. Behold the Universal Service Fund (USF).
What is the USF?:
“(A) system of telecommunications subsidies and fees managed by the United States Federal Communications Commission (FCC) intended to promote universal access to telecommunications services in the United States.”
“Fees” - ??? Government never wants to call its taxes “taxes.” And the USF taxes are MASSIVE. We addressed this in September 2017….
More Broadband Access for Everyone? Get Rid of the Massive Government Taxes and Fees:
“On wireless, there is the Universal Service Fund (USF) tax. Which is currently a monstrous 18.1%. And it goes up automatically every three months. And can also be raised whenever by three votes from unelected Federal Communications Commission (FCC) bureaucrats.”
That tax rate has become an even more monstrous 33.4% in the second quarter of this year. And it’ll be even higher this quarter - because it goes up every quarter. This is simply ridiculous.
Guess who gets taxed?:
“Telecommunications companies must pay a percentage of their interstate end-user revenues to the Universal Service Fund. This percentage is called the contribution factor.”
“Contribution” - ??? Government never wants to call its taxes “taxes.”
And did you note who pays - and by omission who doesn’t?
ISPs pay. And by extension - we do.
But monstrous Big Tech - doesn’t pay a dime. How’s that for even more cronyism?
Some of DC is finally attempting to rectify this ridiculousness.
“The Funding Affordable Internet with Reliable Contributions Act…directs the (Federal Communications Commission) FCC to consider collecting Universal Service Fund (USF) contributions from Big Tech companies ‘such as YouTube, Netflix, and Google,’ the lawmakers announced in a statement Wednesday.”
And now behold perhaps the understatement of all-time:
“‘For too long, Big Tech has been able to profit off of the critical infrastructure used for common day-to-day activities while not helping at a sufficient level to improve those capabilities with broadband investment….’”
When I write, as I write, I of course do lots of live-time research. When I write, I first write a working headline - which may or may not be changed by the time I’ve finished researching and writing. The writing process doesn’t always end where it began.
Again, I chose as today’s working headline “Another Big Tech Crony Free Ride That Needs to End.” The absolute last thing I came across online - as I was finishing this article?
By FCC Republican Commissioner Brendan Carr.
“(T)he FCC's current model for funding internet builds. Many consumers are unaware that the federal government collects roughly $9 billion a year through a tax on their monthly bills for traditional telephone service—both wireless and wireline. The FCC then uses that pot of money, known as the Universal Service Fund, to support internet builds in rural areas and on other efforts to close the digital divide….
“Big Tech has been enjoying a free ride on our internet infrastructure while skipping out on the billions of dollars in costs needed to maintain and build that network. Indeed, one study shows that the online streaming services provided by just five companies—Netflix, YouTube, Amazon Prime, Disney+ and Microsoft—account for a whopping 75 percent of all traffic on rural broadband networks.
“The same study shows that 77-94 percent of total network costs are related to adding capacity or otherwise supporting the delivery of those streaming services. Ordinary Americans, not Big Tech, have been footing the bill for those costs.
“Yet Big Tech derives tremendous value from these high-speed networks. Indeed, Facebook, Apple, Amazon, Netflix and Google generated nearly $1 trillion in revenues in 2020 alone—an almost 20 percent increase over the prior year.
“It would take just 0.009 percent of those revenues to eliminate entirely the unsustainable 30 percent tax that currently hits consumers on their monthly bills….
“Ending Big Tech's free ride on the internet would represent a long-overdue return to the historic compact under which the businesses that benefit from a network pay their fair share for it. It would lower monthly bills for millions of Americans.”
Big Tech’s USF funding exemption - is yet another example of We the Taxpayers augmenting Big Tech’s MASSIVE profits.
For what would be a tiny pittance of these monstrous corporate monstrosities’ profits.
This crony nonsense absolutely has to end. Because it’s ending US.