Conservative Groups Oppose Broadband Taxes on ISPs, Agreeing with Rosenworcel

WASHINGTON, Oct. 31, 2024 – Conservative groups agree with FCC Chairwoman Jessica Rosenworcel, a Democrat: Now is not the time to force Internet Service Providers to support a major broadband subsidy program

Americans for Tax Reform, led by President Grover Norquist, argued that pushing the Universal Service Fund’s quarterly contribution fee onto ISPs would pass costs onto consumers. The Federal Communications Commission’s USF quarterly contribution rate is sitting at 35.8 percent in the fourth quarter of 2024.

"At a time when everyday Americans continue to struggle with inflation, the last thing consumers need are higher monthly internet bills." The group said in a Wednesday letter to Congress.

Rosenworcel took the same position when the FCC adopted Net Neutrality rule in April.

“Any reforms that increase the contribution base…will likely be passed through and have a direct effect on consumers.” Rosenworcel said. “[A mandatory USF contribution would] lead to an increase in the monthly broadband bills paid by the average household.”

In a letter to Sen. Ben Ray Lujan (D) in January, Rosenworcel said that monthly price hikes could reach as high as $17.96, citing the agency’s Future of USF report.

The ATR-led letter noted that, as the USF contribution factor has increased from 14 percent to 35 percent between 2010 and 2024, 82 percent of USF contributors already pass their costs onto consumers.

“Rather than taxing broadband, lawmakers should focus on cutting through the bureaucratic thicket and lowering costs for consumers and broadband providers alike," the ATR-led letter said.

Since its establishment in 1996 the USF, engineered to subsidize broadband access in rural areas and connect schools and libraries, has relied on mandatory fees on wireless and wireline providers to keep its operations afloat.

The letter was signed by representatives of 24 organizations including Citizens Outreach President Chuck Muth, Director of Technology and Innovation at the James Madison Institute Ed Longe, and Taxpayer Protection Alliance President David Williams.