If the FCC decides ultimately to subject broadband services to Title II regulation, Internet service providers (ISPs) could be subjected to $15 billion in additional fees each year that would be passed on to consumers, claims a study published by the Progressive Policy Institute (PPI) on Monday.
Since the D.C. Circuit Court decided in January to strike down key portions of the FCC’s 2010 Open Internet order, the FCC has been considering a new approach to net neutrality that would justify the agency’s authority to regulate broadband under Section 706 of the 1996 Telecommunications Act, reclassify broadband as a common carrier service under Title II of the 1934 Communications Act, or combine elements of both Section 706 and Title II. While FCC Chairman Tom Wheeler is said to favor a hybrid Section 706/Title II approach in achieving the FCC’s open Internet goals, President Obama urged the FCC last month to reclassify broadband under Title II to ensure that “neither the cable company nor the phone company will be able to act as a gatekeeper.” As an independent agency, the FCC is not obligated to act upon the President’s recommendations, and the FCC is not expected to issue new rules until next year.
According to PPI, a Title II track would require broadband ISPs to pay into the federal universal service fund and pay additional state and local government fees that are routinely imposed on common carrier service providers and public utilities. Declaring, “history shows . . . that the fees are passed along to consumers, just as they are now on telecommunications services,” PPI predicted that “Internet bills will soon have all those random charges tacked on at the end, much like they see on their phone bills.” On a per-subscriber basis, PPI estimates that consumers would face $17 in additional federal fees per year and between $67 and $72 in state and local fees that, combined, would add nearly $90 per year to their broadband service bills. PPI further noted that these figures do include added fees subscribers would face as a result of the FCC’s recent decision to boost the Universal Service E-Rate fund by $1.5 billion annually.
As it stressed that “U.S. consumers will have to dig deeper into their pockets for both residential fixed and wireless broadband services,” PPI further maintained that “the higher fees would come on top of the adverse impact on consumers of less investment and slower innovation that would result from reclassification.” Free Press policy director Matt Wood, however, played down PPI’s claims, noting that wireless voice services are already “covered by Title II as are . . . business- grade broadband services.” Suggesting the perceived impact of Title II regulation may be overstated, a spokesman for Public Knowledge remarked, “if it made sense 20, 30, 50 years ago to say everyone should be connected to the phone network, going forward, it makes sense to say everyone should be connected to the Internet.”