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 in
2006. 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". https://www.fcc.gov/document/new-economic-analysis-bolsters-carrs-call-ending-big-techs-free
Any such change, of course, would require an act of Congress. So it will
be uh interesting to watch.

***** Moderator's Note *****

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

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