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Trump wants to tax internet businesses

by on13 December 2018

Give money to the poor telco monopolies

President Donald “Prince of Orange” Trump’s FCC is considering taxing internet companies and giving the money to the ISP monopolies.

The hope is that the fabulously rich telcos will use the money to provide rural broadband. However, the telcos have not done so with the money they have received so far and there is no requirement for them to actually do so.

What appears to Trump is the fact that it is taxing internet companies such as Google and Facebook which do not support them, and giving their profits to telcos which do.

The scheme is just so bizarre and transparently pro-monopoly it is a wonder the FCC thinks it can get away with it. It has been dreamed up by the FCC's Broadband Deployment Advisory Committee (BDAC), which includes members like AT&T, Comcast, Google Fibre, Sprint, and other ISPs and industry representatives.

If adopted by states, the recommended tax would apply to subscription-based retail services that require internet access, such as Netflix, and to advertising-supported services that use the internet, such as Google and Facebook. The tax would also apply to any small or medium-sized business that charges subscription fees for online services or uses online advertising.

The tax would apply to any provider of broadband access, such as cable or wireless operators.

The collected money would go into state rural broadband deployment funds that would help bring faster Internet access to sparsely populated areas. Similar universal service fees are already assessed on landline phone service and mobile phone service nationwide.

Those phone fees contribute to federal programmes such as the FCC's Connect America Fund, which pays AT&T and other carriers to deploy broadband in rural areas.

The BDAC tax proposal is part of a "State Model Code for Accelerating Broadband Infrastructure Deployment and Investment".

Once finalised by the BDAC, each state would have the option of adopting the code. An AT&T executive who is on the FCC advisory committee argued that the recommended tax should apply even more broadly, to any business that helps financially from broadband access in any way. The committee adopted a slightly narrower recommendation that would apply the tax to subscription services and advertising-supported services only.

The BDAC model code doesn't need approval from FCC commissioners “it is adopted by the BDAC as a model code for the states to use, at their discretion".

Last modified on 13 December 2018
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