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  • New Regulations Could Make Internet More Expensive

    Stricter regulations approved by the Federal Communications Commission could mean higher Internet bills for consumers, federal officials warn.

    When the FCC passed its Open Internet order in February, the agency “put broadband in the same regulatory category as phone service, opening the door for the charges,” which consumers already pay on their phone bills, The Los Angeles Times reported Thursday. (RELATED: Net Neutrality Bait and Switch to Title II)

    The average household pays about $3 per month toward the Universal Service Fund, which is tasked with expanding telecommunications services to schools and underserved areas, cumulatively providing the fund with just under $9 billion last year.

    The Times says, “It’s not clear yet” whether the reclassification will result in higher overall fees for consumers, because the FCC only establishes the overall size of the USF, leaving the telecoms to apportion the fees among their customers.

    FCC Chairman Tom Wheeler assured a skeptical Congress the agency has no plans to raise the USF’s funding level, meaning most customers would see the new broadband fees offset by reduced fees on their phone bills. “You would have a reduction in one area that may be accompanied by an increase in another that should end up washing out because the gross number is the same,” he explained.

    Critics of the FCC’s new rules, however, predict the agency will be unable to resist the urge to raise the fee, with so many new contributors available. (RELATED: Title II Will Kill Internet Investment, Critics Claim)

    “The federal government is sure to tap this new revenue stream soon to spend more of consumers’ hard-earned dollars,” warned Republican FCC Commissioner Ajit Pai. “More new taxes are coming … It’s just a matter of when.”

    Interestingly, the increased USF fees could actually work against the very program they are used to fund, Republican Rep. Bob Goodlatte claims in an op-ed on his website, because their greatest impact is on the small broadband providers in underserved areas that the USF is supposed to support. (RELATED: Goodlatte Predicts $11 Billion in New Taxes, Fees From Net’s New Rules)

    “It’s currently estimated that we will see $11 billion in new taxes and fees” after the regulations take effect, Goodlatte writes, arguing that this could “threaten [the] very livelihood … of companies that serve small and rural communities.”

    “Forcing companies out of business rarely results in more consumer choice,” Goodlatte observes.

    Recent experience also suggests that the FCC will increase the size of the USF, the Times claims, pointing out that, “The fund has grown about 47% since 2004,” increasing consistently as the program shifts its focus from phone service to Internet access.

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