WINDING DOWN
An idiosyncratic look at, and comment on, the week's net and technology news
by Alan Lenton
Greetings readers! I'm sending this little missive to you from the dim distant past - last week, but this is internet time, so it must be equivalent to the last ice age in real terms. (By the way, did you know that at the end of the last ice age global warming was a hot topic?)
Because I'm not going to be around during the week to pull down the news, I've taken the opportunity to look at a few stories doing the rounds at the moment in a little more depth than usual. I hope you find the results interesting and useful.
Story: "To tax, or not to tax, that is the question."
Internet 'tax free' shopping is under assault again in the US, as a coalition of state politicians, large retailers and tax collectors attempt to persuade Congress that online retailers should collect out of state sales taxes.
The premise is simple: bricks and mortar retail outfits are legally obliged to collect sales tax for their state governments. When residents shop online or via out of state mail order they are supposed to declare the goods and pay over the tax themselves. I'm sure you won't be surprised to hear that few do!
California's Board of Equalization calculates that the state lost US$1.34 billion in 2003 (US$208 million attributable to online sales) because of this. Of course, these are only estimates, and it's difficult to say to what extent they are exaggerated. What does seem to be the case, though, is that sales taxes have declined by 6.1%, according to a recently released Rockefeller Institute report. This drop is for the fourth quarter of last year compared with the previous year. That's the worst for 50 years.
Of course, not all this decline is attributable to online shopping - far from it. One of the key drivers of the decline is the recession which has hit sales of consumer durables - new cars, washing machines, cookers, even TVs. As people get worried about losing their jobs or taking income cuts they put off new purchases until times are better.
However, sales taxes are the second largest source of state tax revenue, and state politicians are getting more than a little agitated about their declining income stream. Of course, none of us actually like paying taxes, but we have to pay for the things we jointly use, like highways and other state facilities.
Interstate trade is, by law, the provenance of the Federal Government. State legislators, and the large bricks and mortar organisations, who feel they are at an unfair disadvantage, have been lobbying for over seven years to have Congress pass a law that will oblige out of state retailers to collect sales taxes for the state in which the purchaser lives.
So what's the problem?
Complexity - the sheer complexity of collecting the taxes. It's not just that there are 50 different states, each with its own tax rates and rules on what should be taxed. In fact, there are more than 7,000 tax agencies setting the rules and collecting taxes. No, I didn't accidentally add a zero, that number really is seven thousand.
In fact the situation is so complex that the tax authorities can't even agree on the definition of a candy bar! Last time they tried to define it they came up with a definition that would make Girl Scout peanut butter cookies be defined as candy, but Thin Mints and Caramel deLites would be classified as food. What a mess.
So far, the online retailers like eBay and Amazon have been able to use the complexity argument to scotch all the previously proposed laws. To counter this the states have come up with a concept called the Streamlined Sales Tax Agreement, first proposed in 2002.
The problem is, according to the online retailers, the 'simplification' is far from simple. They feel that the states have really made no attempt to simplify things and are trying to barrel legislation through Congress, using the financial crisis, before Congress realises that they've failed to simplify the tax.
The net result is that both sides are squaring off for another round of this long running fight, with Congress as the referee.
"Seconds away, round seven. Ding!"
http://news.cnet.com/8301-13578_3-10220649-38.html?tag=newsLatestHeadlinesArea.0
http://www.rockinst.org/newsroom/news_releases/2009/2009-04-14-sales_tax_
collections_worst_in_50_years.aspx
Homework:
Here's an interesting piece about ice in Antarctica. I doubt that it will get a lot of publicity, since it contradicts the convictions of a lot of high level politicians, so I'll tell you about it myself.
No doubt you will all have seen stories and photographs of the ice sheets in the west of Antarctica breaking up and floating away. This is a matter of concern to the experts, but not to the exclusion of everything else.
That's just as well, because it turns out that there is a very different process going on in the eastern part of Antarctica, which is four times the size of the western part. Here the ice is actually expanding, and is more than making up for the losses in the west. Indeed, the report prepared by The Scientific Committee on Antarctic Research for the recent meting of the Antarctic Treaty nations in Washington noted that the South Pole has shown "significant cooling in recent decades".
This isn't an isolated report, either. A paper due to be published shortly in Geophysical Research Letters is expected to confirm that over the past 30 years, the area of sea ice around the continent has expanded.
Whatever your views on global warming, this is an interesting piece that makes it clear that things involving nature are much more complex that the powers that be would have us believe.
http://www.news.com.au/story/0,27574,25348657-401,00.html
And now on a somewhat less controversial topic, I'd like to invite you to take a look at the Long Now project. The project is to build a mechanical clock that will last 10,000 years and keep perfect time over that interval. The nine feet tall prototype doesn't just keep time, it also keeps track of leap centuries, and is an orrery that displays the orbits of the six innermost planets in our solar system, right down to the ultra-slow wobbles of Earth's axis.
The clock uses a stack of mechanical binary computers, and is capable of selecting any one moment in the 3.65 million days it needs to run for. Its projected life span is twice the length of time the Great Pyramid of Giza has stood.
The steel and stone prototype is beautiful, there's no other word for it. And the real thing? That will be at least 60 feet tall and have multiple displays. Take a look at the project website, it's well worth the time.
http://www.longnow.org/press/articles/ArtDiscover02005.php
http://www.longnow.org/projects/clock/orrery/
Finally, on the thorny subject of bandwidth caps you might like to take a look at a couple of pieces I found on the net.
The first is from Ars Technica looking at Time Warner Cable's (TWC) recent decision to drop its trials of bandwidth caps. This decision, actually the result of much public hostility to the trials, was blamed by TWC on press reports that "were premature and did not tell the full story".
TWC's rationale is that bandwidth usage is rising so rapidly that we will run out by 2012 and it needs money to expand capacity and avoid 'brownouts'. There are a number of problems with this argument. For a start it seems to be based on the 100% a year growth of the internet boom years, rather than the 40-60% a year shown by current figures - some of them TWC's own figures. Then there is the fact that backbone traffic costs have dropped about 50% a year - a sign of plenty of spare capacity if there ever was one. Upgrades to the edge network come out at about $20-$100 per subscriber, not exactly a killer when your 100GB/month rate costs $900/year. (Incidentally, Comcast, a company not exactly known as a soft touch, offers 250GB/month for $515.40/year.)
Even more fascinating than those figures, though is a look at TWC's books. It seems that in 2008 TWC's revenue went up no less than 11%, while its operating costs fell by 12%. Clearly TWC are not going to the wall through user broadband usage on its cables. So what's going on then?
Obviously greed and a desire to squeeze as much cash out of the market as it will stand are part of the reason. However, there is a general belief that there is a second objective which in some ways contradicts the first. It is that TWC wants to protect its cable TV operation by making internet video an expensive option. An interesting idea, isn't it? I'll leave you to make up your own minds on how true this is.
The second piece that's worth a look on this subject is by Lauren Weinstein which is both a fable and a parable about bandwidth caps. I don't normally like Lauren's material, a lot of it is too forced for my taste, but this time he hits it right on the button. Very useful for explaining the issues and outcomes of bandwidth caps to people with no technical expertise!
http://arstechnica.com/tech-policy/news/2009/04/time-warner-cable-to-press-
stop-questioning-our-caps.ars
http://www.nnsquad.org/bandwidth-caps.html
http://blog.wired.com/business/2009/04/time-warner-cab.html
Acknowledgements
This week it's all my own, and I don't have to thank anyone!
Please send suggestions for stories to alan@ibgames.com and include the words Winding Down in the subject line, unless you want your deathless prose gobbled up by my voracious Spamato spam filter...
Alan Lenton
alan@ibgames.com
26 April 2009
Alan Lenton is an on-line games designer, programmer and sociologist. His web site is at http://www.ibgames.net/alan.
Past issues of Winding Down can be found at http://www.ibgames.net/alan/winding/index.html.
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