According to a new analysis, President Barack Obama's plan to reclassify the Internet as a public utility would add an additional $17 billion in user fees.
"We have calculated that the average annual increase in state and local fees levied on U.S. wireline and wireless broadband subscribers will be $67 and $72, respectively," the report from the Progressive Policy Institute found. "The annual increase in federal fees per household will be roughly $17."
Last month, Obama asked the Federal Communications Commission (FCC) to reclassify broadband Internet service as a telecommunications service in the same way that traditional landline telephone service is classified, as opposed to its current "information" service classification, reported The Hill.
If reclassified, internet service providers would be treated like a local electricity or gas-distribution company, the report says.
Should the FCC decide to move forward with Obama's suggestion, proponents argue the agency would have the ability to better oversee internet service providers and ensure that they keep the net neutral. That is, not blocking, slowing or speeding up access to certain websites over others.
However, according to the Progressive Policy Institute, the FCC does not have the legal authority to ban pay-for-priority.
"Once ISPs are labeled 'telecommunications providers' under Title II, their services become subject to both federal and state fees that apply to those services," the report reads. "The two main federal charges are an excise tax and a fee for 'universal service.' (We ignore the federal excise tax for the purposes of our calculation.) States and local municipalities impose similar fees and taxes - from franchise fees to high-cost funds to utility user fees to state-based universal service funds - which vary from state to state, and within states by locality. (We ignore any state and local fees that apply to businesses.) Although the state and federal governments collect these fees from broadband providers, history shows - and economic models of competitive markets predict - that the fees are passed along to customers, just as they are now on telecommunication services. So consumers' Internet bills will soon have all those random charges tacked on at the end, much like they see on their phone bills. And these new reclassification - induced fees will be on top of the FCC's planned 16-cent-per-month (or $1.92 per year) increase in wireless and wireline fees to add $1.5 billion to the fund that finances Internet connections in schools."
