In an Op-Ed for Ars Technica, Free Press Research Director S. Derek Turner discusses the Federal Communications Commission proposal to add a charge to broadband subscriptions to finance the Universal Service Fund. When the USF was created during the Reagan years, it was intended to help low-income and rural communities gain access to vital communications services. At the time, that meant telephone. Now, as broadband service has become more and more important, the FCC has proposed shifting the focus of the fund to help people get online.
The hitch: how to pay for this. The fund was originally paid for with fees and surcharges on telephone bills, but it’s grown into a bloated, poorly managed program that lines the pockets of the companies getting the subsidies. As we start to think about broadband, the same practice of passing the cost on to consumers through extra charges has the potential to undermine adoption in the same communities that we’re trying to help.
USF needs to be revamped, but we shouldn’t be adding an Internet tax to consumers’ already sky-high bills. If we truly want to stabilize the fund, we need to think about proposals for funding that don’t pass costs on to consumers.