The American Consumer Institute Center for Citizen Research (ACI) has officially addressed a pressing concern to the Federal Communications Commission (FCC) regarding the potential reclassification of broadband services. The reclassification, which would shift broadband from an “information service” to a “telecommunications service” under Title II regulation, raises significant concerns about the welfare of broadband consumers. ACI, a non-profit educational and research institute, emphasizes that such a move could severely impact consumer welfare, outweighing any perceived benefits from net neutrality regulations.

Read the full comment here.

Key Takeaways

  • Impact on Consumer Welfare: ACI’s letter to the FCC underscores that reclassifying broadband as a telecommunications service would increase broadband service taxation. This change is anticipated to significantly elevate consumer costs, as states may leverage the new classification to impose higher property taxes and potentially apply gross receipts-based taxes to ISPs.
  • Potential for Increased Costs: The increased tax burden resulting from reclassification would likely be passed on to consumers, raising broadband prices. This could particularly affect lower-income and marginally connected consumers, who are more sensitive to price changes. The anticipated demand suppression from higher costs contradicts the objective of improving broadband affordability and accessibility.
  • A Call for Consideration: The letter highlights that while the intention behind reclassifying broadband services might aim to increase openness and neutrality, the actual outcome could be detrimental to consumer welfare. ACI suggests that a more thorough assessment of the impact on consumer welfare is essential before making any decision.

In light of these concerns, the ACI strongly urges the FCC to consider the broader implications of reclassifying broadband services under Title II regulations. The organization emphasizes placing consumer interests at the forefront of this decision, warning against the potential adverse outcomes of increased taxation and costs on broadband services. For the sake of consumer welfare and the broader goal of enhancing broadband access and affordability, ACI calls on the FCC to reject proposals for reclassification. Stakeholders and the public are encouraged to support this stance, ensuring that consumer interests remain prioritized in regulatory decisions affecting broadband services.

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The American Consumer Institute is a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.