At AT&T’s urging, FCC panel proposes tax on businesses that use the Internet

The Federal Communications Commission's Broadband Deployment Advisory Committee (BDAC) has proposed a new tax on Netflix, Google, Facebook, and many other businesses that require Internet access to operate. If adopted by states, the recommended tax would apply to subscription-based retail services that require Internet access, such as Netflix, and to advertising-supported services that use the Internet, such as Google and Facebook. The tax would also apply to any small- or medium-sized business that charges subscription fees for online services or uses online advertising. The tax would also apply to any provider of broadband access, such as cable or wireless operators. The collected money would go into state rural broadband deployment funds that would help bring faster Internet access to sparsely populated areas. 

BDAC has been criticized by San Jose Mayor Sam Liccardo—who quit the committee—"for advancing the interests of the telecommunications industry over those of the public." An AT&T executive who is on BDAC argued that the recommended tax should apply even more broadly, to any business that benefits financially from broadband access in any way. AT&T stands to be one of the biggest beneficiaries if states assess the new taxes. The proposed tax doesn't seem likely to get support from FCC Chairman Ajit Pai. "Chairman Pai has been clear that he opposes taxes on the Internet," a spokesperson for Chariman Pai said.