FCC backpedals from Internet tax

The FCC is reportedly backing away from a proposal that would add a new tax on broadband Internet service due to public outcry. Democrats and Republicans at the agency are now blaming each other for pushing the idea in the first place.

Neil Grace, a spokesman for Chairman Julius Genachowski, said the commission only made the proposal "following the urging of Republican Commissioners and members of Congress."

"The Chairman remains unconvinced that including broadband is the right approach," he said.

In his turn, Robert McDowell, who happens to be the only Republican on the FCC commission, has rejected the idea that he supported taxing the Internet.

"I have never suggested taxing broadband Internet access," he said.

Consumers already pay a fee on their landline and wireless phone bills to support the FCC's Universal Service Fund, which aims to provide phone service to everyone in the country, even if they live in remote areas. Last year, the FCC overhauled a $4.5 billion portion of the Universal Service Fund and converted it into a broadband Internet subsidy, called the Connect America Fund. The new fund aims to subsidize the construction of high-speed Internet networks to the estimated 19 million Americans who currently lack access.

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