Big Telecom Still Pushing Hard For Broadband Tax On Big Tech

Telecom lobbyists have been working overtime for years in both the US and EU, trying to get policymakers to support the idea of “Big Tech” paying “Big Telecom” billions of additional dollars for no coherent reason.

This taxation effort always involves some variant of the claim that popular tech services are getting a “free ride” on the Internet, so it’s “only fair” that they help pay telecom giants for broadband expansion.

But what’s usually portrayed as a good faith adult effort to bridge the digital divide is, however, a several decade old quest by telecom monopolies to force tech companies to pay them billions of dollars in additional subsidies they haven’t earned and most certainly don’t deserve. Especially since they routinely waste or abuse the billions in taxpayer dollars they’ve already received.

With the recent death by Trumpublicans of a low income COVID broadband discount program, the opportunists at AT&T and other telecoms are ramping up these efforts once again. In several filings spotted by Ars Technica, US Telecom, primarily backed by AT&T, once again trots out the claim that tech giants are somehow freeloaders that should be subsidizing broadband:

“Through focusing on the Big Tech companies who benefit most from broadband connectivity, the Commission will fairly allocate the burden of sustaining USF.”

The FCC’s Universal Service Fund helps fund rural and school broadband expansion, and is primarily funded by a levy on traditional phone lines, which are obviously in decline. To shore up the program, there’s been a push to include a small tax on broadband and wireless lines, which the telecom industry opposes because it would only boost consumer annoyance at already high prices.

Instead, they consistently prefer that the levy be offloaded to tech companies, under the pretense that they’ve been freeloading. Except in U.S. telecom, nobody gets a “free ride.” Decades of consolidation and monopolization ensures that there’s muted competition, in turn ensuring that everybody pays significantly more than the developed nation average for broadband access. Tech companies included.

Here’s the thing: tech companies already pay billions of dollars annually not only for bandwidth, but for their own cloud, CDN, transit, undersea cable, and other infrastructure. Google technically is already a broadband provider when you factor in Google Fi (wireless) and Google Fiber.

Here’s the other thing: there’s nothing about this telecom lobbying effort that’s good faith, even though the news outlets that cover it can’t help but treating it as such.

Telecom is an industry that has waged a relentless, multi-decade war on both regulatory oversight and competition, ensuring that U.S. broadband prices are sky high. If policymakers truly cared about broadband affordability, they’d take aim at corruption and monopolization in telecom.

But that would involve standing up to telecoms patriotically tethered to our domestic intelligence and first responder networks. So instead, we basically throw billions of dollars at telecom giants in exchange for unaffordable fiber networks that are routinely left half completed.

So again, before policymakers expand the contribution base to this lazy subsidy parade, it makes a lot of sense to start implementing significant reforms. Including a survey of numerous school subsidy programs companies like AT&T have been accused of ripping off for decades. Do an honest audit there, then come back to consider expanding any telecom subsidy investment base.

It’s not that having big tech pay some amount of money to genuinely fund broadband expansion is the worst idea ever conceived. It’s that the telecom companies proposing this idea envision a program where they get billions in additional poorly managed dollars managed by feckless bureaucrats who lack the backbone to ensure this money actually goes where it’s supposed to.

In the EU, one big telecom proposal involves directly taxing tech companies that that account for over 5 percent of a telco’s average peak traffic. That plan includes no government involvement or oversight — just a massive wad of cash thrown annually at telecoms with minimal accountability. This is their ideal vision: just billions in unaccountable dollars and euros funneled from tech to telecom under the pretense of progress.

If Trump wins the Presidency, I think there’s an extremely good chance the FCC finally makes the telecom tax on big tech come true. Likely under the guidance of Commissioner Brendan Carr (who has never seen an AT&T idea he didn’t like). That we should reform and audit the billions in regulatory favors and subsidies already thrown at companies like AT&T curiously never enters into frame.