Don't tax our broadband

The Federal Communications Commission didn’t start its regulatory hassling when it took on Eminem’s lyrics in 2002. In fact, this government agency has been trying to censor and regulate our communications technology since the 1930s. Now, President Obama is pushing for it to be almost completely under its control by reclassifying broadband as a taxable public utility.

This “Title II” classification, according to the Progressive Policy Institute, would raise taxes for almost 90 percent of Americans. As consumers of the government, we would be paying on average an additional $67 for landline broadband and $72 for mobile broadband each year with charges varying from state to state. Even if the FCC designates broadband as an interstate service in claiming to avoid tax hikes, states always tax jurisdictionally mixed services that are classified as “interstate” to regulate them, according to the PPI. Interstate wireless revenues are continuously subject to state and local taxes in fees if the feds don’t get to it first. Such a federal program known as the Universal Service Fund is also paid for by lovely phone bill fees.

So if internet is treated as a public utility, what happens to our local and state revenue meant for infrastructure or paying our teachers? What happens to innovation and competition once the state has a complete monopoly over them?

Moreover, pledging billions (of our money) to encourage cities to build networks and push out private companies, Obama doesn’t realize that these investments would greatly reduce competition, raise prices and immensely slow down and worsen our broadband services. I wish I could say he’s only making such crazy offers of “free internet” and “net neutrality” because they’re just those political empty State of the Union promises, but FCC Chairman Tom Wheeler released a statement following the president’s speech in Iowa proclaiming his support for “expanding” broadband deployment.

And while the FCC is an independent body, we could ideally look to Congress to prevent this by gutting the regulations with legislation. But according to the Wall Street Journal, congressional Republicans have a bill that would “ban broadband providers from blocking or slowing down websites or applications," and "from taking money to make some websites load faster than others, known as paid prioritization. . ."

As a private industry, telecommunications has already invested more than $1.2 trillion of their own capital on broadband infrastructure since 1996. Now at least 87 percent of Americans have access to broadband and prices have rapidly fallen. To subject such a success to 1930s regulation would be ridiculous.

For instance, Provo, Utah, recently spent $39 million on a fiber network and ended up having to sell it to Google for $1. Instead of cities wasting taxpayer dollars on what could be a total failure, we should let private businesses take the risk. Google Fiber has already seen success in Kansas City and Austin, Texas for service cheaper than what was provided by the city of Cedar Falls.

After 20 tax increases signed into law during Obama’s six years in office, more taxes and high bills are the last thing we need.


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