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Free Press Fights New Broadband Tax
Why Add Slush Funds to a Broken USF Without Reforming It?
by Karl Bode 08:49AM Thursday Aug 30 2012
Though it has been proposed for quite some time, people have only just recently started realizing that the FCC's broadband plan (which isn't much of one because it ignores the lack of competition) does have a provision in it for applying a $1-$5 monthly tax on each broadband connection to help fund fund the USF, a telecom expansion program with a very long and ugly history of fraud, waste and abuse. There's vast support for this plan ranging from companies like AT&T and Google, to Republicans and Democrats at the FCC alike.

Consumer Group Free Press has been fighting the proposal however, and in an op-ed over at Ars Technica, Free Press Research Director S. Derek Turner explains why. For one, the plan throws subsidies in the laps of company like AT&T that have received billions over the years already, and are now effectively pulling out of the fixed line broadband business. Turner also notes that the fund is still the USF, an effective slush fund nobody in DC had the courage to fix before expanding the contribution base:
The FCC recently adopted some reforms to rural and low-income USF programs, but just this past month the Government Accountability Office noted that the FCC has yet to implement any system for determining each phone company’s actual need for subsidies or any mechanism for tracking the effectiveness of the $8 billion program.

Instead of doing the politically hard work of strengthening the USF by cutting back the amount we toss to the companies feeding at the subsidy trough, politicians like former Democratic Rep. Rick Boucher, regulators like current Republican FCC Commissioner Rob McDowell, and some big companies have called for “expanding the contributions base,” which is DC-speak for adding a USF tax to services like your home broadband connection or smartphone data plan.
Read that underlined part again. The FCC still doesn't really have an accurate idea who needs subsidies, or how those subsidies really get spent once they're doled out. Factor in the fact that the FCC doesn't appear to realize AT&T and Verizon are handing the cable industry a monopoly in wireline to focus on wireless -- and what could possibly go wrong?

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