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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."
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."
...we sue AT&T, Comcast, and Verizon for the $400 billion of public funding they already received for rural broadband and just pocketed and we can use that to provide rural broadband?
I still run a small(tiny me) business 30+ years. I did outside contractor work for 3M corp for over a decade. And I was required to pay for a Workers Comp. Ins. Policy the whole time. Because the state of MN required 3M to furnish the Workers Comp. policy number to them for all their vendors. Every year the state of MN would contact me and ask why I have a workers comp policy but all my reports have 0 payroll. And I explain and they would go huh, interesting.
;)
Everything government does has a cost and no one in government has a clue about the real world.
Just my 2 cents
I wouldn't worry about that just yet.
I'm pretty sure that companies will instead just get smart. For example, there's absolutely no reason NetFlix has to be a tax paying U.S. company at all. They can pretty much just pack up and move to Canada or Europe. We have room for them.
Then there's Amazon which would be more difficult to sort out, but if you simply move the corporation to Canada or Europe and then push orders to U.S. warehouses via leased lines or dark fibre, there shouldn't be any problems. Then Amazon could probably avoid paying 50% of what little taxes they already pay.
Google could probably save billions by leaving the U.S.
Microsoft wouldn't have to move very far at all to save a bunch of money.
I'm almost entirely sure that there's no real problems associated with this. And if I were a shareholder of any significance, I would consider suing any company which insisted in staying in the U.S. if something like this get passed.
I work for a telecom provider almost as big as AT&T. We have a presence in over 100 countries and we make money off of real estate. In some cases, this is literal in the sense that we rent offices and land that we own. In other cases, we rent and sell fiber as if it were real estate. The worst thing that could happen to us is if the content providers decided to pack up and move away from our networks into places where we would have to carry the data instead of providing it locally.
If we were a company like AT&T and were servicing the U.S. and then had to consider the risk of Netflix moving to Canada and moving all their proxies to Canada... or worse Europe, the cost of this to us would be so high we probably would collapse.
Consider that a website like Pornhub published on their technical blog live statistics a few years back of how much content they were delivering. It was approximately 300Tb/sec 24/7 worldwide. That means that there are just a massive number of one handed web surfers at every moment of every day sucking up bandwidth. If Pornhub were to consider moving their CDN outside of the U.S. and incorporating in the Cayman's for example, I would assume that service providers would have to increase capacity by at least 40Tb/sec to compensate for this.
Now consider that XVideos is supposedly bigger than PornHub (in this case it's not just the size, but the size surely matters) but they don't publish statistics like PornHub does. Now consider that YouTube and Netflix are A LOT bigger than either of those two sites.
The cost of just these 4 websites relocating to outside of U.S. borders would place at least 500Tb/sec additional burden on American service providers. Now, to anyone living in a first world country that has visited the U.S. (technically a first world country but second world in most categories other than money) they have horrible Internet access even when paying insane prices and they have miserable mobile/LTE coverage. I drove more or less the entire east coast on business and visiting friends and family last year and even Malta and Gozo were technically more advanced than America.... and those ARE shitholes.
Consider that while the FCC recently had a debate that suggested lowering the definition of broadband to 10/1 connectivity but due to lashback decided that 25/3 is what broadband is... across the first world, we can't even order anything that slow on our mobile phones anymore. How about in the Baltics where at least Lithuania and Latvia has 100Mb/sec fiber for like $15 a month in every house.
No... don't worry... you won't have to worry about footing the bill for this. In fact, we're more than ready to welcome Facebook, Microsoft, Amazon, etc... when they decide to just pack up and take their money and jobs with them.