The FCC Ponders A Hugely Problematic Tax On WiFi

from the this-won't-end-well dept

For years, we’ve noted how telecom and media giants have been trying to force “big tech” to give them huge sums of money for no reason. The shaky logic usually involves claiming that “big tech” gets a “free ride” on telecom networks, something that’s never actually been true. This narrative has been bouncing around telecom policy circles for years, and recently bubbled up once again thanks to FCC Commissioner Brendan Carr.

Carr’s push basically involves parroting AT&T’s claim that big tech should be funding AT&T network upgrades. You’re to ignore the fact that giants like AT&T routinely take billions in tax breaks and subsidies for network upgrades that never arrive. This quest to punish “big tech” with unnecessary new surcharges is something that’s also supported by the National Association of Broadcasters, who have long hated companies like Microsoft’s efforts to use unlicensed spectrum from unused television channels (aka “white spaces”) to deliver new broadband options.

The FCC does desperately need to find more funding revenue to shore up programs like the Universal Service Fund (USF) and E-Rate, which help provide broadband access to schools and low income Americans. So it recently announced it would be considering a new tax on unlicensed spectrum. Pressured by NAB, the Biden FCC’s plan would assess regulatory fees on ?unlicensed spectrum users,? which would include users of Wi-Fi, Bluetooth and other consumer wireless devices. It’s a tax on tech, proposed by telecom and media companies that want to punish their ad and data collection competitors in tech.

Harold Feld, who probably knows more about wireless spectrum policy than anybody, has penned a helpful piece over at Forbes explaining why this is a terrible idea. He outlines that NAB’s real goal is to punish companies like Microsoft for daring to use spectrum the broadcast industry falsely believes belongs to them:

“The NAB has made it abundantly clear this is payback against tech companies ? particularly Microsoft. Broadcasters don?t just claim to own their individual channels. They claim to collectively own all ?broadcast spectrum.? About 10 years ago, the FCC authorized unlicensed access to unused television channels, aka ?TV white spaces.? Broadcasters vowed to strangle the new technology in its cradle rather than share ?their? spectrum and, unfortunately, were largely successful. But in recent years, Microsoft has tried to resurrect the TV white spaces as a way of bringing broadband to rural America.”

The FCC’s proposal may go nowhere. Interim (and soon permanent) FCC boss Jessica Rosenworcel may just be doing her due diligence, and opening the door to a conversation about various options to shore up dwindling FCC broadband program funding. But Harold makes it very clear the proposal, if adopted, would be hugely problematic and defeat the benefit of unlicensed spectrum:

“The idea that a tax on unlicensed spectrum would only hurt Microsoft or ?big tech? is absurd. The whole point of unlicensed spectrum is that it?s open for everyone to use. The effort by broadcasters to impose a Wi-Fi tax should be as laughably ridiculous as modem taxes and email taxes. But rather than simply deny the proposal, the FCC has put it out for public comment.”

While Harold’s correct that this particular push belongs to NAB, the broader push to hit “big tech” with various new FCC regulatory fees is something also being supported by telecom giants, and the regulators who love them. Both broadcasters and telecoms realize the FCC is desperate for new funding for low-income programs, and want to exploit that with efforts that predominately benefit themselves. For NAB, it’s punishing big tech for daring to innovate using spectrum it falsely thinks it owns. For AT&T, it’s forcing “big tech” to pay for network upgrades it routinely fails to finish despite billions in tax breaks, regulatory favors, and subsidies.

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Comments on “The FCC Ponders A Hugely Problematic Tax On WiFi”

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12 Comments
Anonymous Coward says:

they want to ponder the even more huge problems of no competition, piss poor service, piss poor customer service, extra high costs and charges leading to huge profits and no end in sight of any of these because of corrupt politicians who do absolutely fuck all to bring in legislation to stop them! then worry about a tax on wifi that should never even get off the ground and is only designed to make the broadband companies even greater profits with the same piss poor service and customer service as above!

Anonamous Hero says:

This doesn’t make sense to me. AT&T wants free money from "big tech", but the wifi tax would go to the FCC, not AT&T (unless they somehow get more subsidies funded by the wifi tax). In fact, AT&T makes wifi devices so they would likely have to pay the fee—which they wouldn’t actually pay because they’d pass on the cost to customers.

This sounds like it is about AT&T trying to stifle competition, not collect money from "big tech".

James Burkhardt (profile) says:

Re: Re:

This doesn’t make sense to me…..This sounds like it is about AT&T trying to stifle competition, not collect money from "big tech".

Perhaps you should try reading the article.

It’s a tax on tech, proposed by telecom and media companies that want to punish their ad and data collection competitors in tech.

The FCC does desperately need to find more funding revenue to shore up programs like the Universal Service Fund (USF) and E-Rate, which help provide broadband access to schools and low income Americans. So it recently announced it would be considering a new tax on unlicensed spectrum. Pressured by NAB, the Biden FCC’s plan would assess regulatory fees on “unlicensed spectrum users,” which would include users of Wi-Fi, Bluetooth and other consumer wireless devices.

I could at this point just say "Porque no los dos?", having pointed out that the article presents both the idea that AT&T is getting money and that its to punish competitors, but I am going to guess you still claim to not understand how money goes from the FCC to AT&T.

The taxes going to the FCC would fund subsidies, explicitly the USF and E-rate. Where do those subsidies go? How do the listed programs help provide broadband access? By giving money to AT&T, Comcast, Verizon, Et. Al. for providing service. You know, the people this tax "isn’t going to". Its a tax on "tech", stifling competition by collecting money from successful tech companies and giving it to unsuccessful media and ad companies who own and build infrastructure on the taxpayers time.

Does this aid your understanding of how a tax collected by the FCC would be money given to AT&T?

Anon E. Mous (profile) says:

The FCC and the Government could save hundreds of millions and billions of dollars if they would stop giving the Big Telco and Cable co’s money to expand broadband networks that they never complete or use dubious maps and claims of bring broadband to areas where they clearly had the same service in the area and just chose not to complete it for years on end.

Never mind the fact that they never penalize Big Telco and Cable for subsidies they got and then never finished all the work they were supposed to do in which the funding was intended for and the areas that were supposed to get service in. The problem is the goverment chooses to be so liement and when the work isn’t completed to give them deadline after deadline and let them hang on to the money provided with no penalties instead of clawing it back and penalizing them when they don’t finish work or even start it to reduce their eligibility to get future funds, why reward them for the work they wont do or didn’t bother to complete?

If the Telco’s and Cable co’s cant live up to the expectation of which they are supposed to get broadband infrastructure in and operating, time to let municipalities and towns, cities and the competition in to compete.

Too much rubber stamping and looking the other way, stop doing it and clmap down and make it tough for them to get the subsidies if they keep screwing the pooch and start hitting them in the wallet and penalize them for their lack of living up to their end of the deal

Devonavar says:

What the hell does Wifi have to do with the broadcast spectrum?

This article needs way more explanation to make sense.

Wifi, Bluetooth etc. exist in designated "unlicensed spectra", mainly 2.4GHz & 5.6GHz, but also a few less familiar bands. In the US, those bands are set by the FCC.

Notably, those bands are not in the so-called "broadcast spectrum" (these days, pretty much just the 500MHz band), which is a licensed band, dedicated to broadcast television (again, this is policy set by the FCC, not broadcasters).

Within the 500MHz band, the FCC has also licensed a limited number of devices (pretty much entirely wireless audio transmitters as far as I know), which are severely limited in terms of output so they don’t interfere with regular TV signals. These devices are designed to use the "so-called" white spaces, or "shoulders" between the channels.

When people use those wireless transmitters (mainly, churches, live music venues, theatres, and film crews), they are typically "unlicensed users" of the broadcast spectrum (though there are few places where unlicensed use is not permitted, and a license is required to use a wireless audio system).

Allowing just anyone (Microsoft or whoever) to produce unlicensed radio gear that operates in the broadcast spectrum will cause the existing, licensed devices (again, mostly wireless microphones) to stop working due to interference.

From my perspective as an audio engineer, allowing unlicensed use of the broadcast spectrum will make it impossible to do my job, and cost me tens of thousands of dollars in gear that will no longer function properly.

I can’t say I love the idea of a tax on unlicensed users (that will cost me money), but the need to reserve broadcast "white spaces" for wireless audio is vital for me to do my job, and for any "event" venue that uses wireless audio to operate.

This is not an issue of broadcasters "owning" the broadcast spectrum, it’s an issue of using the 500MHz "broadcast" band for the purpose it was reserved for by the FCC, namely broadcast television and the limited number of audio devices that are licensed and designed to share that band. Allowing devices (such as WiFi or Bluetooth) that are designed to share "unlicensed spectrum" with the existing users of the 500MHz band will break things for existing users (i.e. audio techs like me). The two uses are NOT compatible.

And all of that has nothing to do with WiFi or Bluetooth users, who already exist quite happily in their designated 2.4GHz band.

I have no idea if the proposed "tax" is intended to apply to 2.4GHz devices (which would be shocking, and bad), but the article should clarify what is actually meant here. As it is, the article seems to completely misunderstand what’s happening here; the NAB doesn’t give a hoot about WiFi or the 2.4GHz band. It cares that its members that use the 500MHz "broadcast spectrum" are able to continue doing so, and that membership includes a great number of wireless audio manufacturers (i.e. this has nothing to do with AT&T).

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