Since 1996, the FCC's Universal Service Fund, which finances rural telephone companies and nowadays the Schools and Library Fund, the Connect America Fund and Rural Digital Opportunities Fund (and more), has been paid for by a "fee" (quacks like a tax but is administered off the Treasury books) assessed as a percentage of interstate telecommunications revenues. Basically it was designed to take a piece of long distance telephone call money to pay for local service, back when long distance was still being treated as an expensive luxury and never included with your monthly fee. The rate used to be well under 5%. But as LD revenues shrank and demand increased, the fund has been in a death spiral. The tax I mean fee rate, which is adjusted quarterly automatically as required (no vote need be taken), is now over 30%.
Internet services are exempt from this. DSL was removed from USF fees in2006. Cable modems were never covered. But obviously a new source of revenue is needed. One obvious answer is to apply it to Internet access. But that is politically difficult.
FCC Commissioner Brandan Carr, a Republican (meaning he can ask for anything he wants and know that it won't get advanced without the Democratic chair's support), has put his support behind a study that calls for replacing that with a 7% tax on digital advertising -- mainly Google and Facebook. Of course he frames this as "Big Tech".
During my hospital stay, John Levine recovered this post from a spam folder. I had to forward it back to Digest Central and edit the heders to make it usable. Any resulting problems are my fault.
Bill Horne Moderator