FCC eyes tax on Internet service

The Federal Communications Commission plans to tax broadband Internet service. According to the commision, such a tax would help to raise money for the Universal Service Fund, a fund that was designed to ensure every person in America had access to phone service. 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.

AT&T, Sprint, and Google have all supported the tax, likely because it would increase their revenues. The tax would be similar to the fee already paid on landlines and cellular phones.

"If members of Congress understood that the FCC is contemplating a broadband tax, they'd sit up and take notice," said Derek Turner, research director for Free Press, a consumer advocacy group that opposes the tax.

"Today we propose three goals for contribution reform: efficiency, fairness, and sustainability," FCC chairman Genachowski said. "And we underscore that any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption."

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