The U.S. Plans To Draw An Iron Curtain Around The Internet

Katie McAuliffe Executive Director, Digital Liberty
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Hungary’s transparent attempt to limit Internet freedom through taxation brought 100,000 Hungarians into the streets to protest. As of now, the Hungarian government has put the brakes on an Internet tax.

Why should Americans be worried about protests in an Eastern European country? A chief cause of concern for American Internet users is the looming expiration of the Internet Tax Moratorium (Moratorium) on December 11, 2014. Although Hungary’s proposed bill could have become the first nationwide Internet tax (seven U.S. states do tax access), a lapse in the Internet Tax Freedom Act would allow all states and municipalities to begin taxing Internet usage.

Not only will Congress allow Internet taxes if the Internet Access Tax Moratorium expires, the Federal Communications Commission (FCC) will allow taxes on the Internet if the commissioners reclassify it under Title II of the Telecommunications Act of 1996 (Title II).

Hungarian protesters recognized immediately that any form of an Internet tax, either explicit or implicit, is about more than just the government seeking another source of revenue. Limiting a population’s capacity to communicate via the Internet is as basic an affront to free speech and organization of public protest. Taxation of the Internet is a clear violation of liberty and freedom of expression.

The tax completely back fired as citizens took to the streets and their protests gained international attention. Any steps to infringe on Internet accessibility, no matter how small the tax or in what country, constitutes an impingement upon free speech worldwide.

In Hungary over 230,000 citizens joined the protest in some fashion, physically or digitally. Americans should remain vigilant. The chance that an Internet tax could go into effect at home is not slim. American activism to protect Internet access should match and exceed the scale of Hungary’s.

The Republican House already passed a bill to permanently extend the moratorium, which has been national policy since 1998. Unfortunately, the Democrat-led Senate wants a short-term extension rather than permanent one, and is threatening to let the moratorium expire unless Internet sales tax legislation is part of the package.

The moratorium was originally set to expire on November 1, right before elections. Instead of passing a permanent moratorium, Senate Democrats postponed the expiration and the vote to December 11, during the lame duck. The delayed vote clearly gives unaccountable legislators the ability to regulate and tax the Internet.

If a failing Senate isn’t enough, the FCC wants to remove the light touch regulatory barricades that have been in place since 1996, to reclassify the Internet as a Title II communications service. Some of these laws date back to 1934.

In short, reclassification by the FCC means new taxes and fees without a Congressional vote.

Hungarians spoke out viscerally against further government interference in their already regulated communications. Not only will raising taxes on Internet usage limit access, but it will also allow the government to control the Internet as a utility.

In response to the protests, the Hungarian government first altered the proposal from an all-out tax to a capped version coming to $2.89 a month for individuals and $20.62 a month for corporations. The Hungarian government fears that protest efforts in general may be strengthened by Internet use, so limiting access to the Internet via taxes is a sneaky move in order to temper any potential social movements.

Unfortunately, many Americans are advocating for Title II, and unwittingly for Internet taxes and restricted freedoms. The FCC has received over a million comments on net neutrality, many of those comments were in favor of regulating the Internet under the Title II regime. The onerous Title II regulations would treat Internet communications and infrastructure like old-fashioned rotary phones instead of the dynamic smart devices that we know and love.

Title II and the expiration of the moratorium mean taxes and regulations or your data usage, video chats, emails, and video streaming.

Katie McAuliffe is Federal Affairs manager at Americans for Tax Reform and Executive Director of Digital Liberty