Obama's FCC Looks to Tax the Internet
August 28, 2012 2:04 PM
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Alternatives considered are to tax text messages or have a higher flat fee on phone lines
So far an "internet tax" has remained a contentious issue. Efforts to tax the physical service
have flopped in Congress
and are not scheduled for discussion until at least 2014. Meanwhile, states
in forcing online retailers to
pay sales taxes
some Congressional Democrats are calling for
a nation policy enforcing sales tax on the internet. Such efforts are generally tremendously unpopular among the general U.S. population who already feel overtaxed.
I. Taxing the Pipes
But President Barack Obama's iteration of the
U.S. Federal Communications Commission
(FCC) is nonetheless considering a tax on internet services, which would funnel money into the Connect America Fund -- the fund commonly referred to as the
president's "national broadband" plan
The Fund aims to connect rural regions and pump up service speeds in existing regions.
But to get there the FCC says it may need to levy a tax on existing services, a proposal it's
currently accepting public feedback
Telecommunications Act of 1996
, signed into law by President Bill Clinton (D), was the precursor to the current fund. It created the Universal Services Fund (USF), a fund paid for by taxes on phone bills. The program was a mild success; bring telephone service to many new regions. At first it was well funded and the taxes remained small, thanks to people making more (expensive) long distance calls in the 1990s.
As IM, emails, and video chats replaced long distance calls over the last decade, the FCC has had to raise phone bill taxes to keep up with the USF funding requirements -- including increases under President George W. Bush (R).
Late last year President Obama
installed a series of changes
, overhauling the fund as the "
Connect America Fund
" and changing its objective from increasing landline telephone connections to increasing broadband internet connections. But the new program is in jeopardy as many people are ditching the landline and trimming their phone plans.
The FCC wants a new internet tax to make up for a dwindling funding from phone line taxes.
[Image Source: Hang the Bankers]
The FCC's proposed alternatives to the internet service tax include a tax on cell phone text messages, or changing over to a flat tax fee on each phone line (currently phone taxes are collected in a more Constitutionally friendly manner, only taxing interstate phone calls).
II. Plan Has Some Big Supporters
Julius Genachowski, commissioner of the FCC comments, "Today we propose three goals for contribution reform: efficiency, fairness, and sustainability. And we underscore that any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption."
Internet software service providers like Google Inc. (
) are receptive of the plan, saying it makes sense than taxing internet software services like Gmail. Writes Google in its response to the plan, "[Google] strongly supports expanding the [Universal Service Fund] contribution base to include broadband Internet access services."
"Saddling these offerings with new, direct USF contribution obligations [from internet software service providers] 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."
Google supports the proposal to "tax the pipes", but it won't likely be officially floated as this is an election year. [Image Source: Simon Norfolk]
Despite Google's enthusiasm for "taxing the pipes", others take quite the opposite perspective. Derek Turner, research director for
, "If members of Congress understood that the FCC is contemplating a broadband tax, they'd sit up and take notice. For folks who are thinking about adopting broadband, who have much lower incomes or don't value broadband as much—that extra dollar on the margins will cause millions of people... to not adopt. I don't anticipate that the chairman would move to adopt a drastic overhaul ahead of the election."
Indeed, in an election year the Obama administration will likely be wary of levying a new tax on U.S. consumers. Thus the decision of whether to pull the trigger on the new broadband tax will likely be made early next year by the next President -- be it Obama or Mitt Romney.
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RE: Time to press the reset button on this presidency.
8/28/2012 9:39:12 PM
Well, I don't think I could come up with an intelligent or accurate idea like "From each according to ability, to each according to need", like you people have. Look how sustainable an idea that is. With that kind of thinking we could erase the 6 TRILLION dollars in debt you racked up the last four years with your ideas. We should get some of that 8% of the country that's been unemployed the last four years right on that. Talk about "Shovel Ready"!! Heck maybe we could simply MANDATE that some of those people work without pay. That would solve the problem AND save money. The whole "everyone works for the government thing" worked out GREAT for Russia. Look at them today, wait, whoops, never mind...
Tax the city people so that the country people can have high speed internet. That makes sense. Well, like Spock said, "Let the needs of the few outweigh the needs of the many". I love the fact that you actually ADVOCATE that business "spend money on broadband networks in otherwise unprofitable areas." With this statement we are able to see that the Collectivist mind truly DOESN'T understand business. It's not Obama's fault, he's a victim of his ideology (funny on several levels). Business only operates at a loss in one area if it gains them in another. Like Microsoft loses money on Xbox to make money on software. Which judging by the amount of stuff that I purchase when I play drunk on the weekends, is a fantastic idea. But I suppose it was the same liberal math that believed that employers were going to go on a hiring spree because they got a 2K tax break to hire a 40K employee.
In conclusion because people like you bore me, we have gotten to see first hand the liberal ideas and how they've worked. Maybe you should try and clean out your own swamp before trying to drag me down in it.
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