Reclassification could add $15B in new state and local fees, $2B in new federal fees

WASHINGTON, D.C. — The Progressive Policy Institute released a new policy brief that examines the impact of reclassifying the Internet as a public utility on consumers. According to the brief, if the FCC chooses to apply Title II regulation to the Internet, it will not only discourage ISPs from expanding broadband infrastructure, leading to more congestion and higher access prices, it will dramatically increase fees for U.S. broadband consumers.
In Outdated Regulations Will Make Consumers Pay More for Broadband, PPI Senior Fellow Hal Singer and Brookings Non-Resident Senior Fellow Robert Litan argue that consumers will pay more for both residential fixed and wireless broadband service if the Internet is “reclassified” as a public utility. The authors calculated that “the average annual increase in state and local fees levied on U.S. wireline and wireless broadband subscribers will be $67 and $72, respectively. And the annual increase in federal fees per household will be roughly $17.”
“Until now the debate around whether or not to use Title II as the basis for net neutrality rules has included zero analysis of what, if any, impact the outcome will actually have on consumers,” write Litan and Singer. “We looked into the issue and discovered there is nothing but bad news on this front: Once ISPs are labeled “telecommunications providers” under Title II, their services become subject to both federal and state fees that apply to those services.”
“A less financially punitive solution is available to preserve an Open Internet: The FCC could employ its powers under its Section 706 authority to prevent ISPs from blocking access, throttling traffic, or engaging in harmful paid priority.”