Big Tech companies such as Facebook, Apple, Amazon, Netflix and Google should help fund the cost of providing broadband to all Americans, argues FCC Commissioner Brendan Carr in an opinion piece in Newsweek published today.
“Big Tech has been enjoying a free ride on our internet infrastructure while skipping out on the billions of dollars in costs needed to maintain and build that network,” wrote Carr, who noted that Netflix, YouTube, Amazon Prime, Disney+ and Microsoft account for 75% of all traffic on rural broadband networks.
He noted that internet content giants Facebook, Amazon, Apple, Netflix and Google (sometimes known as FAANG) generated nearly $1 trillion in revenues in 2020 and that it would take just 0.009% of those revenues to eliminate the Universal Service Fund fee on telecom service bills.
The Universal Service Fund (USF) covers some of the costs of providing telecom and broadband services in high-cost rural areas. It is funded as a percentage of providers’ traditional telecom, but not internet revenues, even though the funding increasingly has been used to support internet broadband connectivity. Providers pass on those costs to consumers through a fee on phone bills.
Carr pointed to a problem that Telecompetitor has frequently covered: The current method of funding USF has become increasingly unsustainable because, as providers’ traditional voice revenues have been declining, the percentage of those revenues that go toward Universal Service has been climbing and recently surpassed 30%.
Congress has taken an interest in this issue, and various pieces of legislation have been proposed to fund universal broadband through a direct appropriation. But according to Carr, “[w]hile this is an improvement over the FCC’s failing model, it is not without its downsides.”
He notes growing concern about adding to the national debt and argues that “[t]he annual budget process in Washington is far from predictable, so it could lead to an unreliable source of funding.”
Big Tech to Fund Broadband?
Carr isn’t specific about which companies would be required to contribute to the universal broadband program he proposes. Would it only include Big Tech? How would that be defined?
He proposes to leave that up to legislators but advises them to consider revenue streams that have a “sufficient nexus to the internet.” Among those to consider, he says, are video streaming services, online advertising services such as those of Google and Facebook, Apple’s app store and devices, content delivery networks, cloud services such as AWS and online gaming services such as Microsoft’s Xbox.
Carr’s proposal would be a challenging one to implement, however. As he notes, tech companies have been running a decades-long campaign against contributing to universal service.
Opponents position what Carr proposes as “taxing the internet” and could easily reach out to all those streamers, gamers, app users, and others to ask for their support. Even though many of those people may not understand what is meant by what Big Tech will call “taxing the internet,” it just sounds bad. And it will only require a few mouse clicks to get these people to send pre-written emails to their elected representatives asking them to oppose any legislation that threatens to require Big Tech to pay what Carr calls its “fair share.”