FCC Commissioners All Claim 'The Other Guy' Came Up With This Crazy Broadband Tax Idea

from the the-Man-inadvertently-sticks-it-to-himself-this-time dept

Neil Grace, a spokesman for Chairman Julius Genachowski, said the commission only made the proposal “following the urging of Republican Commissioners and members of Congress."



"The Chairman remains unconvinced that including broadband is the right approach,” he said. Robert McDowell, the only Republican on the commission when the proposal was floated earlier this year, flatly rejected that he ever supported the idea. "I have never suggested taxing broadband Internet access," he told The Hill.

McDowell said he is skeptical that the FCC even has the legal authority to tax Internet service.

In April, the FCC suggested a number of ideas for reforming the fund's contribution system, including adding a fee to broadband Internet service. The commission also sought comments on taxing text messages, as well as levying a flat fee on each phone line, instead of the current system, which is based on a portion of the revenue from interstate phone calls.

A number of companies, including AT&T, Sprint and Google, expressed support for a broadband tax in comments filed with the FCC.

What started as a program with important goals (making sure rural farmers can make phone calls and ensuring the poorest among us can dial 911) turned into an unaccountable corporate slush fund. Today USF is an $8 billion annual program, nearly quadrupling in size since its inception, with the bulk of that increase going to landline and wireless phone companies.



Maybe this massive growth would be no concern if USF were a model program with a sterling reputation for efficiency. But it’s not. One recent study found that 59 cents of every USF dollar raised for rural networks was spent on administrative expenses and general overhead. A 2010 audit of the rural USF program found that one out of every four dollars sent to participating phone companies was an “overpayment,” with nearly a billion dollars unaccounted for.

AT&T says that “retail mass market broadband Internet access should be included” in the FCC’s tax, and Google “strongly supports expanding the USF contribution base to include broadband Internet access services,” even as it begs the FCC to exempt Google’s own voice telephony services from the USF tax.

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Most of the time, it seems our "representatives" in Washington simply don't care what their constituents want. The DC thought process is that constituents are not to be trusted, much less listened to. Of course, all bets are off during election cycles. Suddenly, everyone cares.Karl Bode at DSLReports has been following the FCC's "National Broadband Plan" since the first draft was made public back in March . He noted then that an additional $1-5 was to be added to existing customers' monthly bills in order to help fund the USF (Universal Service Fund) and expand broadband coverage.Now, after asking for public comment and realizing that election season is in full swing, the FCC, along with pretty much everyone in both parties is pointing fingers at each other for daring to hit the poor consumer with yet another tax , all while insisting that they weren't the ones who proposed it. It seems this "proposal" magically appeared without anyone's support, if you believe the sudden backtracking from, well, everyone.The Hill's Technology Blog has a few more details, including this bit of interesting bit of skepticism from McDowell, who is first in line to head the FCC if there's a party shift this November :So, if I'm reading this right, no one on the FCC supports this proposal that the FCC put forth and is now considering, even though no one wants it. Got it.Of course, this wasn't the only suggestion the FCC considered, but the others weren't much better.Between now and November, this plan will have no support from previously interested politicians. An FCC official has referred to the idea as "politically toxic." Once the elections are over, though, it will probably be placed right back on the table.The "internet tax" does have some support, though.Now, there's a good reason for these companies to support the funding of the UCF through these fees. For starters, this gets passed along to the customers so it's no money out of their pocket. (And it appears on the bill as a below-the-line charge, in order to allow both the government and the phone company to avoid calling it a "tax.") Even better, the UCF has become a loosely-regulated "slush fund" which dumps collected "fees" directly back into the pockets of the same companies collecting it in the first place.The corporate supporters of this plan to "expand the USF contributions base" have no constituency to worry about and have boldly stated that they'd love to have additional fees levied, presumably for noble reasons, like providing 911 service for rural farmers or helping lower income individuals acquire broadband services.Conveniently ignoring the fact that adding additional fees does nothing to encourage broadband adoption by the low income population, the companies who stand to benefit the most from having more money dumped into a big cash pool are also first in line to make generous offers with other peoples' cash. The government is always more than happy to "pick up the check" on grandiose gestures, but at least every two-to-four years they remember whose wallet they're actually using. But these companies, with a hand stuck in both your back pocket AND the till don't have a periodic attack of conscience. This "broadband tax" will return to the table again and again as long as lobbyists still roam D.C.

Filed Under: broadband, broadband tax, fcc, universal service fund, usf