Piling on more broadband taxes won’t increase broadband adoption
With average wireless taxes pegged at 16% according to MyWireless.org, the FCC is proposing an additional $1 per month tax on broadband services to fund an inter-operable public safety network which could cost up to $16 billion. This seems to run counter to the goal of the FCC to increase broadband penetration because piling more consumption taxes on broadband can only have the opposite affect. We tax cigarettes like this because we want fewer people to smoke but do we really want fewer people on broadband?
Most of these taxes are state and local and 4.79% is attributed to the Universal Service Fund (USF) which largely goes to subsidize insanely expensive wired phone lines in “High Cost” areas and other erroneous charges. The high local and state tax rates are particularly disturbing when those same cities and states want federal subsidies to deploy more broadband. Because broadband penetration is primarily a problem of uptake rather than a lack of availability, the FCC should be doing everything to encourage lower overall consumption taxes rather than setting a bad example with higher taxes if it really wants to meet its goal of increasing broadband penetration.
And we know that many of the people who don’t have broadband have chosen not to get it because of cost issues, so increasing cost is clearly counter-productive.
BTW, wasn’t there money in the stimulus for the interoperable public safety network?
There was only $7B total for the broadband stimulus. The inter-operable public safety network is estimated to be as high as $16B.
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