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Subject The Internet's Perfect Storm
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As the first hurricane moves along the U.S. coast, there is another potential catastrophe coming and it’s not really on anyone’s radar.

On the one hand, the FCC is looking to impose net neutrality regulations in the name of protecting the open Internet, even if it means reclassifying the Internet as a regulated public utility. At the same time, the Internet Tax Moratorium, which prevents state and local governments from imposing new taxes on Internet access services, is set to expire on November 1, 2014. Unknown to most pundits and policymakers, the confluence of these two issues could lead to devastating consequences that will inhibit Internet investment, significantly increase consumer broadband prices, and decrease service subscribership.

Completely ignored from these policies discussions, however, is the fact that reclassifying ISP services to common carrier-style telecommunications regulation would expose broadband services to existing state and local tax laws that are specifically designed to target “regulated” and “telecommunications” services.

At the same time that this is happening, the Internet Tax Moratorium is set to expire, which would allow state and local governments to impose new and additional taxes on broadband access. If the current state and local taxes imposed on wireless service consumers are any indication of what is to befall broadband consumers, state and local taxes will rise significantly and so will broadband costs. Today, wireless taxes already exceed taxes on other telecommunications services, with consumers living in six states paying more than 20% in taxes on their wireless bills or about three times the rate of sales taxes. The combination of FCC reclassification and the expiration of the Internet moratorium will mean the end of the growing Internet as we know it. It will be the perfect storm.

Read more: [link to thehill.com]
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