FCC Ups Phone Tax To Subsidize Internet, Also Wants To Expand Obamaphone Program

The Federal Communications Commission will spend another $1.5 billion a year on “high-speed Internet in schools and libraries,” relying on a tax increase to fund it. FCC Republicans aren’t actually opposed to the measure. Their argument is that the spending increase should come from eliminating waste and abuse elsewhere within the system.

The commission’s three Democrats argued that the step will ensure that students have access to the online tools they need to prepare for the jobs of the future. According to the FCC, two-thirds of U.S. schools, serving 40 million students, don’t have adequate Internet connections.

But the additional funding has to come from somewhere. The FCC’s vote means that government fees on consumers’ phone bills will go up. The commission’s two Republicans vehemently dissented, warning that the action will waste consumers’ money.

“That’s a 17.2 percent telephone-tax increase for American families that are still struggling to make ends meet in this lackluster economy,” Republican FCC Commissioner Ajit Pai said. “And while those who can afford to live in Georgetown, Manhattan’s Upper East Side, or Malibu might scoff at the increased taxes, families in middle America are sick of being nickeled and dimed by Washington politicians.”

And the Democrats currently in control of the FCC don’t want to stop there. They now want to move on to expand what’s commonly referred to as the Obamaphone program.

She argued that the FCC should now consider expanding its Lifeline program to cover Internet access. Lifeline currently subsidizes only phone service for poor consumers. Wheeler suggested that all three Democrats are on board with updating Lifeline.

But expanding that program–which Republicans derisively refer to as the “Obamaphone” program (despite the fact that it was created in 1985)–would be sure to spark another partisan battle.


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