FCC Backs Off On Internet Tax

The Federal Communications Commission had (yet again) proposed to tax broadband Internet service in the same way they tax phone services.  After public outcry over the issue, however, they’ve backed off on the idea.

This has lead to partisan name-calling as each side attempts to blame the other for the unpopular idea.

The tax would have been a part of the FCC’s Universal Service Fund, which pays for telephone infrastructure in areas that otherwise probably would not have it, such as remote and rural locations.  A $4.5 billion portion of that was overhauled last year as a broadband Internet subsidy to begin providing infrastructure for broadband access.

The concern is that the money going into the USF has been drying up now that long distance calls on land lines are becoming less and less frequent – most long distance calls are now made via cellular networks, which don’t charge these fees.  Interestingly, the broadband tax was supported by most of the major Internet Service Providers like AT&T and Sprint as well as by Google.

One FCC official remarked in news commentary that the broadband tax is “politically toxic” as more and more people voiced their anger over the idea to the Commission.

According to The Hill:

The FCC official said Chairman Genachowski was always skeptical about a broadband fee because he feared it would discourage people from adopting the technology. The official said that after reviewing comments from the public on the topic, the chairman is unpersuaded that a broadband fee would be a good policy.

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