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FCC Panel Wants To Tax Internet-Using Businesses, Give the Money To ISPs (arstechnica.com)

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."

17 of 243 comments (clear)

  1. Gotta love it! by fustakrakich · · Score: 5, Insightful

    We're letting *AT&T, Comcast, Google Fiber, Sprint, and other ISPs and industry representatives* write our tax code. I guess it's better than letting Enron, Exxon, and DuPont write them... Oh wait, they probably do

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    1. Re:Gotta love it! by WaffleMonster · · Score: 5, Insightful

      False. Right there in the write-up, don't even need to RTFA (emphasis mine):

      USF is a shining example of how not to implement a tax.

      1. Regressive taxation of a (once) essential service. About as ridiculous as taxing food to subsidize food for the poor.

      2. Tax rate is ambiguous and incalculable subject to unnecessary amounts of complexity where larger providers have inherent advantage to leverage their ability to do the necessary paperwork to pay a lower rate. Only the interstate component of telephone service is taxable so providers either have to use default "safe harbor" rate or conduct a "study" using a methodology the FCC has to sign off on to determine the effective tax rate given portion of service that is interstate.

      To pour salt on the wound safe harbor rate for certain categories of telephone service is astronomical. Wireless safe harbor for example is half that of Internet OTT voice service for no reason other to fuck over small providers because they can.

      the model code says that states "shall determine the appropriate State Universal Service assessment methodology and rate consistent with federal law and FCC policy."

      Calculation methodology is irrelevant... AT&T and crew still controls who gets the money (themselves) and what rate will be subject to factors and criteria's set by states.

    2. Re: Gotta love it! by fortfive · · Score: 5, Insightful

      Also, don't internet business already, actually pay for connectivity? Like, million dollar contracts to backbone isps, which would include att and verizon? And don't subscribers pay?

      How do they get away with this idiocy?

      Nevermind the subsidies already mentioned.

      I have no sympathy for google or even Netflix, but I do have sympathy for myself, because it is me that will be paying that tax.

  2. Another money funnel to corporations? by kimgkimg · · Score: 4, Insightful

    Because you haven't given ISPs enough ways to screw the consumer and make money already? Unbelievable.

    1. Re:Another money funnel to corporations? by Anonymous Coward · · Score: 5, Insightful

      I thought that the reason we got rid of net-neutrality is because of our faith in the free market.

      So why don't we just let the free market bring faster Internet to places that need it? Why do we need *both* an unregulated ISP market *and* tax-funded support for that market?

      Of course I am being rhetorical. They want *all* of our money, every penny, and they will abuse every bit of power they have to get it.

    2. Re:Another money funnel to corporations? by Anonymous Coward · · Score: 2, Insightful

      The ISPs listed also want to be content providers.

      So all businesses that are solely content providers are competitors.

      So they want to tax their competitors, and have that tax money delivered directly to them.

      Of course their competitors will just pass the tax along to the consumers, which is fine by the ISPs because the higher costs will drive more consumers to go for the cheaper content provided by the ISPs.

      You remarked that this is "unbelievable." I disagree. This behavior is completely consistent with the incentives that the ISPs have, and the position they are in. The only people who are surprised by this are people who naively believe that the wealthy potentates at the top of these hierarchies got there by practicing generosity, goodwill towards others, and fair dealing.
       

  3. GOP give away to rural communities by rsilvergun · · Score: 5, Insightful

    who tend to vote for them. Not that I mind rural communities getting the Internet, but not like this. Make it municipal broad bank. A country just did it for about $5 bucks a month. Verizon got billions of my money to build out rural fiber, kept the money and never did the work.

    No more. Fund municipal broadband out of the General fund or tell the fuckers to fuck off. All this does is charge me $5 bucks a month (I pay for business class at home) for free money in AT&Ts hands.

    Once again, we've got an election in 2 years. Show up at your primary and vote the fuckers out. Then show up at the general and put some real pro-consumer folks in. We had plenty of them in the primary in 2018 but so few showed up for the primary that most of these yahoo incumbents survived. Again, no more. Primary them and then vote in pro-worker and pro-consumer reps who refuse corporate PAC money.

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    1. Re:GOP give away to rural communities by mishehu · · Score: 3, Insightful

      The funny thing is that you think that the rural voters are going to get anything out of this proposal. They won't. Hell, the FCC doesn't even really know how many households out there can and cannot get broadband services...

    2. Re:GOP give away to rural communities by Stormy+Dragon · · Score: 5, Insightful

      It's not even a giveaway to rural communities, it's a give away to big telecom companies. There's already existing fees to pay for rural broadband. The telecom companies just take the grants and never end up building the stuff they promise and the government never calls them on it or forces them to return the funding.

  4. On the other hand ... by fahrbot-bot · · Score: 5, Insightful

    Since "Internet-using" companies already pay their ISPs for access and bandwidth, like everyone else does, perhaps the ISPs could take some their -- what do you call them, ah, yes -- enormous profits and use them to build rural infrastructure all on their own. Sure, perhaps the ROI / profits from that won't be enough to list under the "Rape and Pillage" section of the quarterly reports, but maybe people will hate ISPs a little less -- except, obviously, for Comcast. :-)

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  5. it's like giving the gas tax to private toll roads by Joe_Dragon · · Score: 4, Insightful

    it's like giving the gas tax to private toll roads and no they will not be made into free roads.

  6. You're already paying the fuckers! by nctritech · · Score: 5, Insightful

    You're already paying the fuckers! CenturyLink is being paid $500 MILLION in tax money yearly for rural broadband expansion and they're only using it to cover areas that someone else covers already so they can stifle competition, completely ignoring unserved areas. The rationale behind municipal broadband bans is that it's unfair to compete with the government because they have tax authority, yet they gladly take tax money and use it to be anti-competitive. NO MORE TAX MONEY TO BIG ISPs!

  7. ITFA motherfuckers by WaffleMonster · · Score: 3, Insightful

    They can't tax Internet use. It's literally against the law.

    But don't let that stand in the way of FCC announcing to the country how totally, utterly and completely corrupt they are.

  8. Re:Plus another tax and bureaucracy by lgw · · Score: 1, Insightful

    You don't understand: big companies have money. The job of the government is to tax all the things. Europe has been far less shy about blatantly inventing reasons to take billions from companies.

    --
    Socialism: a lie told by totalitarians and believed by fools.
  9. Re:Plus another tax and bureaucracy by currently_awake · · Score: 4, Insightful

    Europe has universal healthcare, national daycare, welfare etc. Capitalism and Socialism are like fire: A little bit keeps you warm, a lot kills you.

  10. I don't, read my post, not just the subject by rsilvergun · · Score: 3, Insightful

    They're not going to get squat, but the GOP will get a photo op where they tell them they're gonna get Internet and the propaganda news outlets they watch will trumpet that. Then when the Internet never materializes they'll blame it on tax and spend liberals' job killing regulations.

    Keep in mind I'm not necessarily blaming the Rural folks for falling for this crap. The big reason I want them to have internet is so they can stop watching cable and over air TV and get out of the propaganda bubble their in. I think it would be great for the country as a whole. Those communities have massive hospital shortages and problems with clean drinking water. The American left (think the Bernie wing of the Democratic party) wants to solve those problems, but they keep losing elections to rural voters (who, thanks to the Senate, Electoral college and gerrymandering have about 40x the voting power of a city voter) keep shooting down attempts to help them.

    If we could somehow get the message to them about how much the GOP is screwing them over we could fix just about everything.

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  11. Re:Plus another tax and bureaucracy by Bert64 · · Score: 4, Insightful

    The rich people will just find ways to avoid paying the tax, or move elsewhere.
    Taxes mostly hurt and poor and middle classes.

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