FCC School Internet Plan Would Raise Phone Taxes 17.2%

Posted by at 10:56 am on November 17, 2014

FCC LogoThe FCC will propose to increase spending on school internet services, and the money will come from a surge in taxes on wired and wireless telephone bills.

Under the FCC’s proposal, which is not yet public, it will increase the annual cap on school internet spending from $2.4 billion to $3.9 billion. The $1.5 billon jump in spending will be covered by a tax-rate increase of 17.2%, according to FCC Commissioner Ajit Pai, who disagrees with the proposal. “I strongly oppose this 17.2% tax increase.

Instead of imposing a greater burden on families struggling to make ends meet in this lackluster economy, the Commission should pursue fiscally responsible reforms. These reforms would cut the bureaucratic red tape and focus resources on the children and library patrons of poor and rural America, where the need is greatest.” This tax increase will apply to all phones in the country.

The FCC estimates most lines will see a jump of $2 per year, with households (assuming multiple lines) will see a jump of $6. The increase would apply to the Universal Service Fund portion of phone bills, which the government has been trying to overhaul for some time.

The government would draw from the USF to improve fiber optics connecting schools to the internet, and the Wi-Fi in schools buildings themselves.

“While the impact on consumers will be small, the impact on children, teachers, local communities and American competitiveness will be great,” said the FCC in a statement.

The CTIA Wireless Association generally opposes any new taxes levied against wireless phone bills. The FCC’s proposal will be discussed openly at the agency’s Dec. 11 meeting.

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