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FCC examines plan to tax broadband subscription fees

updated 09:41 pm EDT, Mon August 27, 2012

Connect America Fund beneficiary of additional funds

The US Federal Communications Commission (FCC) is evaluating a plan to place a new tax on broadband Internet service. The move would generate funds for the Connect America Fund, a subsidy created from the Universal Service Fund in 2011 to expand Internet access to rural and underserved areas. The FCC issued a request for comment on the proposal in April.

Dozens of companies have agreed in principle to the proposal, such as Google, Sprint, and AT&T. In it's approve of the proposal, Google argued that the current market conditions "strongly supports expanding the [Universal Service Fund] contribution base to include broadband Internet access services."

Google suggested that taxing email or Google Voice wouldn't be the best way to generate the funds as "saddling these offerings with new, direct USF contribution obligations is likely to restrict innovative options for all communications consumers and cause immediate and lasting harm to the users, pioneers, and innovators of Internet-based services."

The Connect America fund is fueled by an additional fee on landline and cell phone bills. Alternative proposals in the FCC text include taxing text messages, or levying a flat fee on each phone line instead of taking a percentage of fees associated with interstate phone calls.

FCC Chairman Julius Genachowski calls the current contribution system outdated and inefficient. "Today we propose three goals for contribution reform: efficiency, fairness, and sustainability," the chairman said. He added that "any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption."

A law passed in 1998 may interfere with the proposal. The Internet Tax Freedom Act prohibits the government from taxing Internet access, a move intended to boost broadband subscriptions. However, the FCC views the Universal Service Fund contributions as "fees" passed onto customers and not "taxes."



By Electronista Staff
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  1. Kaleb Thorp

    Fresh-Faced Recruit

    Joined: 08-27-12

    Fantastic, now the rest of us get to have higher internet bills.

  1. LenE

    Fresh-Faced Recruit

    Joined: 05-19-04

    Expanding access sounds good, but the mechanism to do so is never mentioned. The government doesn't build that!

    The telecoms build this access, but they act rationally, and build where they have large population densities. They charge the government mandated fee, so that they can be re-paid to build out in more rural and "underserved" areas. In the end, nobody watches to make sure any of this happens.

  1. mgpalma

    Fresh-Faced Recruit

    Joined: 09-27-00

    Additionally all this will accomplish is fund yet another department of 'federal workers' since it seems the goal these days is to grow the government into an obscenely large behemoth that we will never be able to shrink. Lovely. Before establishing yet another tax and expansion of government let's say we audit what we have and see if ANY of it is actually accomplishing anything good with ANY kind of efficiency, which I highly doubt.

  1. The Vicar

    Junior Member

    Joined: 07-01-09

    Most likely, the money will be used to reimburse existing broadband providers for extending their networks into rural areas, rather than having the government do it. After all, if the government did it, it would be cheap and probably last a long time without costing the users anything extra, like the roads and electricity service which the government put in back in the Depression era, and the Republicans never let anything like that happen these days; if a bunch of executives can't find a way to skim a lot of money off the top and then keep charging everyone afterwards for incredibly bad service (private schools, deregulated electricity companies, private water suppliers, etc. etc. etc.) then it gets blasted as "socialism".

  1. And.reg

    Mac Elite

    Joined: 02-22-04

    Greetings. I am unable to delete my posts, and apparently you moderators are on some kind of a strike.

    Therefore, I have removed the content of the original post by hand.

    I am asking for this post to be deleted, since I don't seem to have the option to do that myself.

  1. blahblahbber

    Banned

    Joined: 02-01-05

    Originally Posted by mgpalmaView Post

    Additionally all this will accomplish is fund yet another department of 'federal workers' since it seems the goal these days is to grow the government into an obscenely large behemoth that we will never be able to shrink. Lovely. Before establishing yet another tax and expansion of government let's say we audit what we have and see if ANY of it is actually accomplishing anything good with ANY kind of efficiency, which I highly doubt.

    Wow, OMG... I am glad I am not the only one who thinks that the government's plans are to take employment into their own hands!! I see it too; the government wants to take over all jobs so they are taking over every industry... meaning all will have the same supposedly benefits, treatment, etc AND the government can anchor itself with it's role in the country so that it's power is never overthrown.... In fact, it really will be about having control, which in turn does not give you really any choices; so then the government (run by corps) can really profit and lock down their interests and rape the country again... transfer those earnings off shore again.

    Way to get the stick up the (you know where)... as if we the people haven't had enough! Crazy times isn't it?!?! Imagine working for an insolvent government, how would anybody want to help a corrupt government get bigger? Sure corruption is everywhere, but the time here in the US looks to be up sooner than later...Brazil is looking better and better.....

  1. blahblahbber

    Banned

    Joined: 02-01-05

    The laws nowadays that come out of this country government always make you think twice about what they are really wanting to do.... Constitution should say "Read Between the Lines".... hangman must have originated from in this country.

  1. blahblahbber

    Banned

    Joined: 02-01-05

    Here is a paste that basically sums up the US:

    What is mindboggling to me is that people still believe that people in Europe or the US are elected by democratic processess. The US will under no circumstances allow any true democracy emerge anywhere in the world, because this would create a conflict of interests between a fascist (the US) and a democratic nation. And she will purse this with any means necessary: Direct military intervention, UW (unconventional Warfare), engineered colored revolution, political assassination. That's why there are more than 1000 military installations in every part of the world, to deter, or be on the ready to intervene if something does not go as planned. So unless THE NEOLIBERAL FASCIST SYSTEM IN THE US IS ABOLISHED, no democratic changes can take place in the world.

    <-----Thank a smart anonymous individual.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    Here is one for you, blahblahbber.

    "It is better to stay silent and let people think you are an idiot than to open your mouth and remove all doubt."
    Thank Abraham Lincoln.

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