FCC Panel Wants To Tax Internet-Using Businesses, Give the Money To ISPs

The FCC's Broadband Deployment Advisory Committee (BDAC), which includes members like AT&T, Comcast, Google Fiber, Sprint, and other ISPs and industry representatives, is proposing a tax on websites to pay for rural broadband. Ars Technica reports: If adopted by states, the recommended tax would apply to subscription-based retail services that require Internet access, such as Netflix, and to advertising-supported services that use the Internet, such as Google and Facebook. The tax would also apply to any small- or medium-sized business that charges subscription fees for online services or uses online advertising. The tax would also apply to any provider of broadband access, such as cable or wireless operators. The collected money would go into state rural broadband deployment funds that would help bring faster Internet access to sparsely populated areas. Similar universal service fees are already assessed on landline phone service and mobile phone service nationwide. Those phone fees contribute to federal programs such as the FCC's Connect America Fund, which pays AT&T and other carriers to deploy broadband in rural areas.

The BDAC tax proposal is part of a 'State Model Code for Accelerating Broadband Infrastructure Deployment and Investment.' Once finalized by the BDAC, each state would have the option of adopting the code. An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. The committee ultimately adopted a slightly more narrow recommendation that would apply the tax to subscription services and advertising-supported services only. The BDAC model code doesn't need approval from FCC commissioners -- 'it is adopted by the BDAC as a model code for the states to use, at their discretion,' Ajit Pai's spokesperson told Ars. As for how big the proposed taxes would be, the model code says that states 'shall determine the appropriate State Universal Service assessment methodology and rate consistent with federal law and FCC policy.'

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