Late last year, President Obama called on the Federal Communications Commission to enact far-reaching regulations that would grant the federal government unprecedented control over the internet. The concept of “net neutrality” is based on Internet Service Providers (ISPs) treating all internet traffic “equally.” However, Obama has advocated for far more than is needed to achieve this concept by calling on the FCC to issue rules that reclassify broadband as a public utility under Title II of the Communications Act.
Reclassifying broadband as a utility not only threatens the internet as we know it, but will kill jobs, stifle investment and increase costs for American consumers. Moreover, the move could open the door to other forms of heavy-handed internet regulations and taxes. Given these serious economic implications, the FCC should put a hold on its late February vote on these rules and allow Congress to come up with a legislative solution.
Over the years the internet has grown rapidly largely due to the hands-off regulatory approach the government has taken. Yet instead of allowing the internet to remain in an atmosphere that has encouraged widespread growth, President Obama and FCC Chairman Tom Wheelers want to regulate the internet like telegraphs and telephones from the 1930’s. Not only are such archaic regulations inappropriate for our digital era, they will increase broadband costs for hardworking Americans.
By reclassifying broadband as a utility, the Obama administration will levy taxes on all broadband consumers and smartphone users via a Universal Service Fund fee. USF fees are already collected from traditional and cellular phones. Adding broadband to the same Title II category would slap consumers with a 16.1 percent tax increase on their internet bills–an estimated $24 billion for Uncle Sam. This adds up to almost $100 a year in additional costs for wireline broadband consumers and around $137 per smartphone for wireless customers –a deep financial burn that will certainly be felt by American families with more than one smartphone on their plan.
While reclassification undoubtedly spells bad news for consumers, the implications for industry workers could be even more dire. Title II reclassification would stifle investment –an $11.8 billion decrease –and directly impact jobs. According to an American Action Forum study, the drop in investment could kill as many as 174,000 broadband related jobs by 2019.
By Kuper Jones – The Hill –