In response to public outcry over proposals to institute a tax on broadband Internet services, the Federal Communications Commission is withdrawing its support and casting blame outside the agency.
The FCC’s Connect America Fund, which received bipartisan support from the full Commission in October 2011, would tax broadband Internet subscriptions in urban areas in order to help lessen broadband costs in underserved and rural communities.
The fund evolved from an effort to reform the FCC’s Universal Service Fund, established in 1997 through congressional mandate in the 1996 Telecommunications Act.
The USF charges higher phone rates in urban areas and redistributes the money to rural phone providers.
FCC Chairman Julius Genachowski was applauded by even his regular detractors for efforts to reform the fund, and supporters viewed it as a way to ensure coverage to underserved areas.
Recent opposition to the fund, however, stems from a perspective that it amounts to corporate welfare and a tax on consumers to subsidize service providers’ coverage.
The Hill reported Sunday that the Republicans and Democrats “at the agency are now blaming each other for pushing the idea in the first place.”