The 'bit tax': The case for further research

Science and Public Policy

Volumn 23, Issue 6, 1996, Pages 353-360

  Soete, Luc ^a   Kamp, Karin ^a  

^a UNU MERIT   (Netherlands)

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EID: 6244248302     PISSN: 03023427     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (6)

1. The High Level Expert Group was chaired by Luc Soete.
2. We are reminded of the story told by Nathan Rosenberg about the response of Faraday to the sceptical politician who asked Faraday after he had discovered the basic principle of electricity (electromagnetic induction in 1831) what it was good for "Sir, I do not know what it is good for. But of one thing I am quite certain, some day you will tax it." (Rosenberg, 1996).
3. See the official press release of the Flemish government: "Bit tax boort inspanningen van de Via a m se regering de grond in (Bit tax undermines efforts of the Flemish government)", Brussels. 12 June 1996.
4. See N Newman, "The great Internet tax drain". Technology Review, May/June 1996.
5. The argument of the Flemish government that "a 'bit tax' amounts to taxing the employment of the future in order to maintain employment of the past" is a good illustration of such exaggeration.
6. The billing and accounting costs of telephony is said to represent more than half what customers pay for a telephone call. However, as argued by MacKie-Mason and Varian (see reference 10), the main reason for this is that marginal costs are "so low, not because billing costs are so large. Since it costs almost nothing to make a call during non-peak periods, accounting costs are almost 100% of the incremental cost of a non-peak call!" As a percentage of total costs, MacKie-Mason and Varian estimate AT&T's billing costs to be less than 10%.