Newly implemented Internet regulations could impose a tax increase on broadband providers, resulting in higher internet prices for consumers.
The Los Angeles Times reported Thursday that a fee funding the Universal Service Fund (USF), a program established to subsidize telephone service in low-income and rural areas, could not only appear on telephone bills–but broadband bills too. The USF raised $8.8 billion in 2014. This is how the fund works, as described by The LA Times: “For phone service, telecom firms pass the fees directly to their customers, with the average household paying about $3 a month.”
According to the Federal Communications Commission (FCC) website, the USF was initially established to bring “telephone service to low-income households and high-cost areas.” The Telecommunications Act of 1996 expanded that definition to include “among other things rural health care providers and eligible schools and libraries.”
The fund is overseen by a board comprised of FCC commissioners, state utility commissioners, and a consumer advocate representative. As The LA Times noted, the implementation of the USF to broadband has been delayed until this board makes its decision on the matter, which should happen in the coming weeks.
“I think it is incorrect… to say anything in what we have done will lead to an increase in [USF] fee contributions,” FCC Chairman Tom Wheeler, a Democrat, recently told House members.
But Commissioner Ajit Pai, a Republican, strongly disagrees. “The federal government is sure to tap this new revenue stream soon to spend more of consumers’ hard-earned dollars,” cautioned Pai. “So when it comes to broadband, read my lips: More new taxes are coming. It’s just a matter of when.”
In February, the FCC approved net neutrality along a 3-2 party line vote to treat the Internet like a utility rather than an information service, allowing the commission to exercise sweeping oversight. Trade organization USTelecom and Texas-based Alamo Broadband filed suit in the Fifth Circuit Court of Appeals in Washington, D.C. last month challenging the regulations.
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This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom