NerdWallet: R.I. Internet users would pay $21.4 million in extra taxes if Internet considered a utility

RHODE ISLAND Internet users would pay a total of $21.4 million in extra taxes if the Federal Communications Commission votes today to classify the Internet as a utility under Title II, according to a NerdWallet study.
RHODE ISLAND Internet users would pay a total of $21.4 million in extra taxes if the Federal Communications Commission votes today to classify the Internet as a utility under Title II, according to a NerdWallet study.

PROVIDENCE – Rhode Island Internet users would pay a total of $21.4 million in extra taxes if the Federal Communications Commission votes today to classify the Internet as a utility under Title II, according to a NerdWallet study.
If the Internet is classified as a utility, states would be allowed to levy a telecom tax on consumers similar to what is charged for phone services, NerdWallet, a personal finance website, said.
That means the average consumer would pay an extra $69 per household each year, based on an estimated 310,751 households with Internet in the Ocean State. Rhode Island also would pay more than any other New England state, according to the study.
Nationwide, taxing the Internet is projected to cost consumers $6.2 billion, with the average consumer paying an extra $67 a year, NerdWallet said.
Using data on current telecommunications taxes, economists Hal Singer and Robert Litan estimated the potential tax burden to broadband consumers should the FCC approve the net neutrality proposal, NerdWallet said.
NerdWallet combined their estimates with U.S. Census Bureau figures on the number of Internet connected households in each state to determine the states where consumers would see the highest overall tax increase.
Pennsylvania residents would have to pay the highest increase in taxes per household – an estimated $131 a year. At an estimated $8 tax, Delaware’s residents would see the lowest projected increase.
Maine, Connecticut, Massachusetts and New Hampshire were at the lower end, at $36, $43, $44 and $45, respectively. Vermont was not included because price data was unavailable.
NerdWallet said that experts agree that classifying the Internet as a utility will raise broadband costs, but said it remains unclear what the exact tax implications will be if the FCC acts on the plan.
“These taxes will be assessed separately at the federal, state and local level, so where you live makes a big difference in how much you’ll pay. Since many taxes are percentage based, consumers in cities where Internet services are already the most expensive in each state will likely see the biggest increase in taxes,” NerdWallet said.
Meanwhile, Bloomberg News reported that AT&T Inc. and Verizon Communications Inc. are girding for a fight against the sweeping new U.S. Internet regulations that the mobile-phone carriers say will discourage them from making billions of dollars in network investment.
The vote marks the first time U.S. regulators are weighing rules that govern how wireless carriers deliver online service.
The proposal is exposing a division in the more than $200 billion wireless industry, with Verizon and AT&T – the biggest and second-biggest carriers – saying they oppose efforts to regulate how they run the networks that zip data wirelessly around the world. No. 3 Sprint Corp. and No. 4 T-Mobile US Inc. say they welcome measures that will rein in their larger competitors.
The proposals are a sea change for an industry that until now has had little oversight of the way it manages wireless Web content.

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