During the net neutrality debate we saw a lot of criticism heaped on people like Senator Mike Lee and Ajit Pai, a Republican member of the FCC, when they warned that adopting these policies would raise prices for consumers. Politifact gave Mike Lee a “Half True” for warning costs would increase, but insisted that the net result was not clear. It’s been all of a few weeks since the deal was inked now and the results are starting to trickle in. I’ll bet you could never guess which way the answer is going…
Recently adopted net neutrality regulations soon could make your monthly Internet bill more complicated — and potentially more expensive.
Every month, consumers pay a small fee on their phone bills for a federal program that uses the money — a total of $8.8 billion raised nationwide last year — to provide affordable access to telecommunications services in rural areas, underserved inner cities and schools.
Now the fee could start appearing on broadband bills too, in a major expansion of the nearly two-decade-old Universal Service Fund program.
It’s not clear yet, however, if most consumers would end up paying more in total USF fees than they do now.
I like the way that the LA Times analysis says it’s “not clear” if you’ll wind up paying more. I suppose that’s technically true, but it relies on the assumption that the government is going to completely ignore a potential new revenue stream. And as we all know, they’re just so good at leaving taxpayer money in our pockets when there’s a chance to grab it.
The feds want to continue to expand the existing program where services will be extended into under-served areas and that costs money. In order to pay for it, they’ll have to tap the broadband providers who route the traffic and provide these services. So what do you think happens next? I suppose one school of thought among big government advocates is that AT&T and all of their competitors are just such a nice, generous bunch of guys that they’ll reach into their own pockets and pony up the cash. I mean, they wouldn’t just pass the costs on to the consumer, would they?
The FCC sets the size of the fund, and the size has been increasing almost every year as the focus has shifted from providing phone service to providing Internet access to those without it. The fund has grown about 47% since 2004.
In December, the agency approved a $1.5-billion annual increase in the amount the fund can spend to help boost high-speed online services for schools and libraries under the E-rate program.
E-rate is one of four programs funded by the USF, which was created as part of the 1996 overhaul of telecommunications laws. The other programs provide assistance for low-income consumers, help rural residents connect with healthcare providers and help customers in isolated areas pay the higher costs of reaching them.
Supporters of net neutrality pointed to the so called Internet Tax Freedom Act, however that legislation bans taxes, but not fees. Also, it’s not just additional cash grabs at the federal level under discussion. Most states already have a fee structure baked into the cake, and if the opportunity is there to expand that revenue stream you can expect at least some of them to jump on board. In fact, Vermont’s director of telecom services already said that his state was already exploring the option of hiking fees.
How can you tell if a lobbyist is lying to you? Their lips are moving.