The FCC’s network neutrality proceeding may easily provide the answer. By classifying broadband access services as “interstate telecommunications services,” those services would suddenly become required to pay FCC fees. At the current 16.1% fee structure, it would be perhaps the largest, one-time tax increase on the Internet. The FCC would have many billions of dollars of expanded revenue base to fund new programs without, according to the FCC, any need for congressional authorization.
If the FCC succeeds in classifying some or all of broadband services as interstate telecommunications services, it would effectively exclude its bureaucratic rivals in both the states and federal government from competing to regulate and to tax the Internet. State and local governments do not have the authority to tax or regulate interstate telecommunications services. Moreover, the Federal Trade Commission, which increasingly seeks to regulate the Internet, has no jurisdiction over common carriers or “telecommunications services.”
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