The plan is to have the tax help expand broadband coverage
The internet is a good thing. On that much, most people would agree. Some countries have gone as far as to declare internet access a basic human right. Most are not quite there yet, but access is important in most places.
The problem is, infrastructure is expensive, especially when dealing with broadband and especially in hard-to-reach places.
This is the point where governments get involved, in various ways, either by building their own networks, by subsidizing network expansions or by forcing telecommunications companies to cover a certain percentage of the population.
That's how a lot of people got telephone lines decades ago and that's how broadband is going to become universally available.
In the US, where corporations are citizens and have a lot more power than the average Joe, government networks or forced deployment are not real alternatives. That leaves subsidies as the only option. But subsidies require money and the US budget is not exactly overflowing.
One solution pursued by the Federal Communications Commission (FCC) is a "fee," essentially a tax on all broadband users which would go towards expanding coverage. Interestingly, both carriers, i.e. AT&T or Spring, and internet companies like Google agree to this solution.
The FCC already has a similar fund, the Universal Service Fund, which was designed to expand phone line coverage. It works in the same way, landline subscriptions are taxed to help build infrastructure. The FCC diverted some of the money in that fund to broadband support.
But fewer and fewer people actually pay for landlines, which is why the FCC is looking at alternatives. There are no concrete plans as of yet, but the "broadband tax" has the most backers. Google, for example, would rather have this than a tax on internet services.
"Saddling these offerings with new, direct USF contribution obligations is likely to restrict innovative options for all communications consumers and cause immediate and lasting harm to the users, pioneers, and innovators of Internet-based services," it believes.