CONNECTING THE DOTS: SHOULD BIG TECH FOOT THE BILL FOR BROADBAND EXPANSION?

It’s no longer a mere luxury that more and more of us enjoy: it is the digital lifeline to our jobs, education, healthcare and entertainment. And the more deeply the digital skein of the internet covers every aspect of our existence, the greater the questions that arise about who ought to pay for it. The latest intriguing answer comes from a surprising source: tech companies, the primary beneficiaries of the digital age itself, ought to contribute to the growth of global broadband networks and keep them affordable.

THE PUSH FOR A NEW FUNDING FRAMEWORK

A recent article in Wired by diplomatic editor Gideon Lichfield has reignited the debate. It quotes a dramatic proposal from America’s internet service providers (ISPs) to the Federal Communications Commission (FCC), through their lobby group USTelecom. They want new ‘egress’ fees on Big Tech. This money would subsidise network deployment through investment in broadband infrastructure, as well as create affordability programmes.

THE CATALYST BEHIND THE PROPOSAL

And there are some good reasons behind their call to action. USTelecom points to the recent death of a broadband discount programme as a moment that should push the FCC to rethink how it funds the Universal Service Fund (USF). The USF helps to finance network construction in unserved areas and subsidises low-income rates. It is currently funded by hefty fees levied on phone companies – fees that are typically passed on to customers.

THE ARGUMENT FOR TECH'S CONTRIBUTION

And USTelecom’s rationale claims that Big Tech companies, which profit greatly from having broadband, should pay into the system that makes their profits possible. Redirecting some of the unbelievable wealth generated by these tech giants into the USF would better share the costs of building and maintaining broadband infrastructure.

REVIVING THE AFFORDABLE CONNECTIVITY PROGRAM

At the heart of USTelecom’s pitch is the hypothetical reinstatement of the Affordable Connectivity Program (ACP), which offered crucial monthly subsidies before its funding dried up. Through an expansion of the USF contributing pool to include Big Tech, ISPs argue that the ACP, and other programmes like it, could not only be maintained but expanded, ensuring permanent affordability of broadband for poor families.

A FOCUSED DEBATE

Thinking about taxing Big Tech to help fund broadband expansion is just beginning to gain currency but, as far as I can tell, FCC chairwoman Jessica Rosenworcel hasn’t yet signalled an intention to expand USF contributions beyond the confines of the old-fashioned circuit-switched world. The discussion and the USTelecom filing reflect, though, a burgeoning realisation that a sustainable funding base for the USF – at least $9 billion a year – won’t be achieved unless the FCC rethinks how that money is collected from telecommunications companies to pay for broadband builds. With just the wireless changes the FCC should have taken earlier now in prospect, it’s interesting to imagine what environmental activists would say if SF’s Gates Parkway were now running through a wetland.

BROADBAND FUNDING AND THE LAW

In July last year, the US Supreme Court handed down its decision rejecting the oral arguments of a challenge to the legality of the USF, confirming its importance to the debate on how we can fund broadband expansion and affordability within the larger context of the FCC’s mandate to promote widespread accessibility of broadband services.

EXPLORING THE FUTURE OF BROADBAND FUNDING

But these discussions also mark a turning point in the long-term evolution of how we finance digital connectedness. The companies that are taxed may well become the companies that fund broadband infrastructure or affordability programmes. What we can say, with some confidence, is that the bargain between how the internet is used and how it’s paid for is far from settled.

UNDERSTANDING THE UNIVERSAL SERVICE FUND

Undergirding all this discussion is the Universal Service Fund, the centrepiece of the FCC’s universal service strategy, which is paid for by phone companies and used to fund programmes such as building networks in rural areas and affordability programmes for low-income households. Should we also expand its funding sources to include revenue from Big Tech? Those questions involve weightier issues of equity and access, and the future of the digital divide.

In sum, the idea of Big Tech footing the bill for expanding and affordabilising broadband is food for thought during the deliberations of the coming decade – as policy and society, but also technology, are intertwined like never before, and perhaps even more explicitly than we think.