Policy

Those E-mail Tax Warnings Weren't False; They Were Sent from the Future!

FCC looks at new taxes to pay for expanding broadband access for five percent of the population.

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Well, somebody has to pay for those farmers to stream porn on their Macbooks, and if you follow America's agricultural policies, you know it's obviously not going to be them. Via The Hill:

The Federal Communications Commission is eyeing a proposal to tax broadband Internet service.

The move would funnel money to the Connect America Fund, a subsidy the agency created last year to expand Internet access.

The FCC issued a request for comments on the proposal in April. Dozens of companies and trade associations have weighed in, but the issue has largely flown under the public's radar. 

"Look at those otters swimming and holding hands at the same time! I had no idea what I was missing!"

The Connect America Fund declares on its website: "Broadband has gone from being a luxury to a necessity for full participation in our economy and society – for all Americans." Citation needed, perhaps, maybe? The site also claims there are 18 million Americans without "robust broadband" access. It does not point out that this is just five percent of the U.S. population. It does have a photo of a farmer sitting on a tractor wheel looking at a laptop, though.

The use of the word "robust" is important. This isn't just about providing infrastructural access to broadband for people who don't have broadband. It's about the federal government using taxes and fees to subsidize the improvement of existing private transmission systems:

Julius Genachowski, the FCC's chairman, has made expanding broadband access his top priority. He argues that a high-speed Internet connection is critical for succeeding in the 21st century economy and that expanding Internet access is the country's next great infrastructure challenge.

But the money for the new Internet subsidy is still coming from the fees on phone bills.

And in recent years, with more people sending emails instead of making long-distance phone calls, the money flowing into the program has begun to dry up. The Universal Service fee has had to grow to a larger and larger portion of phone bills to compensate.

So they're talking about ideas like taxes on broadband or even taxes on text messages to pay for this venture. The next time your overly credulous aunt sends you a forward from her AOL account warning that Congress is going to start taxing e-mails, she might not need to be reminded to visit Snopes now and then.

Some of this broadband expansion is already getting significant government funding. In 2010 a nonprofit collective was granted $81 million in federal stimulus funds to build 400 miles worth of Internet cable through the California desert to reach its most isolated communities. Here's how Michael Ort, speaking for the collective, justified it:

"It meant that not everyone could get broadband in the area and the broadband they could get may not have been as fast as the government set a standard for," Ort said.

Ort claimed the project would provide an estimated 1,100 jobs. However about 700 of those jobs would be temporary construction jobs, and Ort said the project would ultimately provide about 50 permanent jobs. The remaining jobs Ort classified as "indirect jobs," jobs Ort said will be created in the private market as a side effect of the construction.

"(We're) buying equipment, tools, we're renting rooms in motels — those generate jobs," he said.

$81 million dollars for 50 permanent jobs, a bunch of jobs that will probably be guaranteed to labor unions in order to avoid environmental lawsuits, and a bunch of jobs that are entirely made up ("indirect jobs"). All this expense will provide broadband (or rather, improve the quality of broadband) for a small number of people who may not even want it for all we know. (I was the editor of the Desert Dispatch at the time this story was written, and they couldn't even give us an estimate on how many people were expected to benefit from this access. When this story was written, Barstow, a town of 25,000 in the Mojave Desert, had three private high-speed Internet providers)

And, of course, a final reminder that this is just to provide these rural residents the ability to buy broadband service. So this tax is to pay for the government to build an infrastructure for broadband providers, who then get the benefit of charging customers for service without having to invest their own money on infrastructure. Much like the government's renewable energy subsidies, taxpayers are being forced to pay for the construction of facilities of dubious market value for the benefit of private industry. If this were an oil company, what kind of outcry would there be?