While the federal government is poised to spend billions expanding broadband service and helping bridge the digital divide, an FCC commissioner is pitching a different idea: Make Big Tech pay for it instead.
Brendan Carr, the senior Republican FCC commissioner, called for tech giants like Amazon, Apple, Facebook, and Google to help pay for federal efforts to connect more American households to broadband internet.
"It is time to fundamentally rethink how we fund our high-speed networks," Carr wrote in an op-ed published in Newsweek. "We should start requiring Big Tech to pay its fair share."
After the COVID-19 pandemic helped expose the depth of the digital divide in the US, policymakers in Washington, DC are pledging to bring broadband service to more remote regions and low-income households. The Biden administration is calling for $100 billion in spending to connect every American household to broadband internet by the end of the decade.
Meanwhile, Carr is arguing Congress should tax big tech to pay for it.
"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," Carr said. He pointed to a study showing that online streaming by just five companies — Netflix, YouTube, Amazon Prime, Disney Plus, and Microsoft — account for a whopping 75% of all traffic on rural broadband networks.
"Yet Big Tech derives tremendous value from these high-speed networks," Carr added. "Indeed, Facebook, Apple, Amazon, Netflix and Google generated nearly $1 trillion in revenues in 2020 alone — an almost 20 percent increase over the prior year."
Who mostly pays for that internet infrastructure? Carr points out that ordinary Americans pay for it, through taxes on their monthly phone bills. Those taxes go into the FCC's Universal Service Fund, which helps subsidize broadband expansion in rural areas.
It's outdated, Carr argues. "This is like taxing horseshoes to pay for highways."
Carr has no power to make any of these changes himself. He's one of five commissioners who oversee the FCC. Instead, he's calling on Congress to do it.
"Legislators could consider a range of potential revenue streams that have a sufficient nexus to the internet, including video streaming services like Netflix, YouTube and Amazon Prime; online advertising services like those offered by Google and Facebook; Apple's App Store and devices; content delivery networks and cloud services like AWS and online gaming services like Microsoft's Xbox," Carr suggests.
However, lobbying groups such as the Internet Alliance, which represents the world's largest internet companies such as Amazon, Facebook, Google, and Microsoft, argue against "taxing the internet" to fund broadband.
