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05/03/2024 09:08:00 am

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Net Neutrality Laws Might Hike Broadband Cost

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(Photo : Reuters) The FCC might have hurt their case by not disclosing price hikes for broadband.

The Federal Communications Commission has come under fire from Republican representatives fighting against the reclassification of internet service providers under Title II 'common carrier' -- the same label the FCC slapped on telephone companies a century ago.

This time, critics claim the internet reclassification will allow the FCC to tax broadband companies through the Universal Service Fund program. Telecommunication companies already pay for this service -- usually tacked on to the customer's bill -- and ISPs might be the next to start paying for the FCC's fund.

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The reclassification would allow the FCC to set a tax regulation for broadband providers and force them to pledge a small amount to the fund. The USF goes to funding public libraries, hospitals, alongside building infrastructure in rural areas.

Considering the broadband companies progress in rural U.S. has been uninspiring, we expect the FCC will look for big donations from companies like Comcast, Time Warner Cable and AT&T. The issue is that consumers might end up getting the brunt of the increase in tax due to ISPs being able to tack the program onto monthly bills.

U.S. broadband is already astronomically high compared to Europe and developed Asian countries even with lower speeds. If it goes any higher -- which it most likely will if USF is funded -- it might push even more away from a broadband subscription.

FCC Chairman Tom Wheeler claims this will not be the case. Any household with a landline should be able to cover the service cost provided they are with the same supplier for broadband. This means they can't be charged twice by the company.

That seems all well and good but if the FCC fancies keeping track of over 100 million landline customers to make sure the broadband companies aren't pulling a fast one, we think they'll be in for quite a treat.

Wheeler also couldn't confirm broadband customer's bills wouldn't go up as a result of net neutrality, something critics have been attacking ever since the FCC entered the law into the federal registry.

"The federal government is sure to tap this new revenue stream soon to spend more of consumers' hard-earned dollars," warned Ajit Pai, a Republican on the FCC. "So when it comes to broadband, read my lips: More new taxes are coming. It's just a matter of when."

The FCC will be in discussion about the new net neutrality laws for the next few months, expected to become a major talking point in the opening run in the presidential election.

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