Obama's Network Neutrality Plan Could Mean New Internet Fees

President Barack Obama thrilled liberals and Internet activists by calling for the "strongest possible" network neutrality regulations to ensure that all Internet traffic is treated equally. But his plan, which is still under consideration by the Federal Communications Commission, has raised a host of thorny regulatory questions unrelated to net neutrality, such as whether to impose government fees on Internet service.

The possibility of a new "Internet tax" is sure to enrage Republicans, who are already fiercely opposed to Obama's plan for stronger regulation of Internet service. "The net result is that every single American broadband customer will have to pay a new tax or taxes to access the Internet," FCC Commissioner Ajit Pai warned. "That translates into less broadband adoption, especially among the millions of families that still struggle to make ends meet in this lackluster economy." Technically, the FCC does not have the authority to "tax." But the agency already collects about $8 billion every year from phone companies for its Universal Service Fund. The companies pass those costs on to consumers in the form of monthly fees on their phone bills. So far, the FCC has rejected calls to expand the fees to other services, such as broadband. That could change under the president's net neutrality plan.