The federal government cannot afford the subsidies being poured into telecommunication services, unless it's planning to impose a new tax on broadband Internet Service, a member of the Federal Communications Commission said on Wednesday.
"It's telling that the agency is already spending money in anticipation of getting a greater amount of revenue from the Universal Service Fund," FCC Commissioner Ajit Pai told a Senate panel.
"We boosted the E-Rate budget by $1.5 billion per year last year. By all accounts, next month we're going to expand the Lifeline program to broadband without any meaningful budget or cap. That money is already being spent, and it has to come from somewhere. I would respectfully submit to you that ultimately, it's going to be in the form of a broadband tax," Pai added.
The E-Rate program provides financial assistance to schools and libraries to receive telecommunication service, while the Lifeline provides assistance to low-income consumers. Funding for both comes out of the FCC's Universal Service Fund, which surpassed a record $12 billion last year.
Money for the fund comes from a fee imposed on telecommunication services. Currently, that amounts to an 18.2 percent tax on telephone service. However, since reclassifying broadband providers as public utilities last year, the FCC has been considering whether to impose the same fee on Internet service. A decision was originally due in April 2015, but has been repeatedly delayed.
"We said we anticipated a short extension of the ... deadline would be appropriate," Pai said. "We are now over a year from the Open Internet Order, and we still have no recommendation.
"Every one of your constituents is going to have to pay more for Internet access to fund the FCC's spending obligations that it has already made through the Universal Service Fund," Pai said. "We should be straightforward with the American people and decline this opportunity to impose a broadband tax."