MISSED CONNECTIONS: Obama administration plans to tax internet access

| August 29 2012
Hannah Thoreson

No, you’re never going to find Mitt Romney on Reddit pretending to be one of the cool kids, pandering to the Bronies.  But where will you find Obama when he’s not sulking in front of his MacBook, sleeves rolled up like he’s working hard?

… Oh, just using the FCC to pursue a redistributive tax on broadband internet access.

From 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.

Of course, some of the tax’s biggest supporters are companies where Obama’s campaign donors may be found en masse.   Google, for one, has come out vocally in favor of this policy.  For Google, the logic of backing a tax on internet access seems to be that it would prevent a tax on access to the services it provides.

Large telecoms such as AT&T have also lent their support to this new tax.  It’s corporate welfare in its most pure form:  the money is taken out of the pockets of customers and given directly to companies that are already providing internet service.  This policy will further encourage the near-monopoly state of internet access that exists in most places, because it discourages new players from entering the market.  It also creates an incentive for companies to continue rolling out a somewhat dated technological infrastructure, as the subsidies are designed to get people on broadband — not whatever the next big thing is.  Wireless data services have gotten better and more popular as time has gone on, but the funds from this tax would give companies an incentive to keep installing cables and modems.

As Forbes points out, the massive expansion in broadband internet access is probably one of the great technological successes of the last 10 years.  But it occurred with minimal government intervention and no federal tax on access.  In fact, as of June 2011, 95% of Americans had access to broadband internet services.  This doesn’t mean that they purchased them, but that the technology is available.

Some believe that the FCC’s ultimate motive in getting involved with ISP’s is a broader regulatory power.  This should be seen as unwelcome not only for technological and economic reasons, but because it could lead to restrictions on online freedom.  The FCC’s indecency rules for TV stations or an ideologically biased policy like the Fairness Doctrine for a hint at what could be coming.  No matter what kind of content you want to see on the internet, at some point somebody who doesn’t like it will have political power.  The FCC must be prevented from acquiring regulatory power over online content, and it starts with keeping them out of our pockets.

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