US proposes big tech tax to fund internet distribution

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The Federal Communications Commission (FCC) has proposed that the US should explore tasking big tech companies with funding future internet deployments, as the nation initiates one of the biggest shake-ups in communications sector financing in decades.

At its simplest level, the FCC argued current funding methods evolved from the divestiture of AT&T in 1982 and later legislation, all of which was largely created before the current internet age and so places the burden on consumers.

In a statement, FCC commissioner Brendan Carr noted the means of financing the $9 billion per year Universal Service Fund used to bankroll various connectivity schemes was “stuck in a death spiral” due to employing “a mechanism that made sense back in the dial-up and screeching modem days of the 1990s”.

The FCC is now being tasked with overhauling this mechanism, with a levy on big tech being considered covering fixed and mobile broadband.

Carr noted this approach was gaining traction “across Europe, Asia and South America”, as authorities begin to recognise the online industry should “contribute a fair share to support the networks and digital divide efforts that allow them to realise unprecedented revenues”.

Failing to shift the burden on to big tech players could result in consumers opting not to go online, Carr argued, stating hiking current levies to maintain the USF pot could ultimately swell household’s broadband bills by around $200 per year.

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