Sen. Fetterman Wants Big Tech Tax to Help Fund ACP

Nov 13, 2023

By Ted Hearn, Editor of Policyband

It’s been said that regulation is a process, not an event.

But Sen. John Fetterman (D-Pa.) sure shook things up Sunday by staging what appeared to be quite an event in the otherwise plodding telecom policy world of Washington, D.C. In an Op-Ed for Penn Live, Fetterman said he wanted “massive tech companies” – meaning Google, Facebook and possibly others – to help fund the financially vulnerable Affordable Connectivity Program (ACP).

The ACP – funded exclusively by Congress for now – cuts Internet bills by $30 a month for eligible recipients. More than 20 million households are participating in the program. But the $14.2 billion ACP could go extinct because it is expected to run out of money around next April without action by Congress.

Renewing ACP with funding by Congress – and no one else – has been widely seen as the most likely default outcome. The ACP, overseen by the Federal Communications Commission, enjoys bipartisan support on Capitol Hill and has the backing of cable broadband Internet Service Providers (ISPs) and left-leaning consumer groups, an unusual alignment that. Still, because Congress is viewed as dysfunctional on so many levels, many in frustration are betting the ACP will go dark.

But perhaps Fetterman has embraced an idea – taxing Big Tech in the name of fairness for his 700,000 Pennsylvania constituents enrolled in the ACP – that could serve as the catalyst that injects new life into politics of the ACP.

In his article, Fetterman said, “My bill will make massive tech companies – the same companies that benefit from expanded service that ACP spurs – pay their fair share and help pay for the program.” Although he did not provide much in the way of specifics, he did make a promise as to timing: “I’m committed to working to get it done – and get it done quickly.” Fetterman’s office was unavailable to take questions.

On occasion, Big Tech under pressure will throw in the towel – for example, Apple just decided to end its opposition to a national right-to-repair law. But dunning a percentage of Google’s and Facebook’s digital ad revenue (Fetterman’s likely condition) in the range of billions of dollars annually is another matter entirely and will likely trigger a vigorous response from these key Silicon Valley players.

Fetterman’s bill would, if passed, also represent a major setback to the broadband subsidy plans favored by NTCA (The Rural Broadband Association) and INCOMPAS. These two groups insist on putting the burden on ISPs. They support reforming the $9 billion, financially troubled Universal Service Fund by including “fixed and mobile broadband Internet access revenues in the contribution base” – in other words, slapping a USF tax on 112 million monthly broadband bills for the first time.

The FCC has cited a study claiming that a proposal akin to that of NTCA-INCOMPAS would raise monthly bills by $17.96 a month and cause 10 million Internet subscribers to drop service.

Requiring Big Tech to subsidize broadband has some key Republican support. FCC Commissioner Brendan Carr has been a vocal proponent of requiring deep-pocketed Big Tech firms to contribute to USF, which, among other things, subsidizes broadband service in schools and libraries and is separate from the ACP.

“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 wrote in Newsweek two years ago, adding that “just five companies – Netflix, YouTube, Amazon Prime, Disney+ and Microsoft – account for a whopping 75 percent of all traffic on rural broadband networks.”

Carr acknowledges that Congress would need to pass a law authorizing the FCC to expand the USF contribution base to include Big Tech revenue.

Is it possible that a Carr-proposed amendment on USF to Fetterman’s bill on ACP could receive the signature of President Biden in the Rose Garden?

That would be quite an event.