Feds planning to shift telephone tax to broadband

Part of the Federal Communications Commission's National Broadband Plan, which chairman Julius Genachowski announced on March 17, calls for a 15 percent tax currently levied on telephone service to be shifted to broadband, according to KATU.com. The move is reportedly to encourage broadband access in rural areas.Opponents of the tax worry that the federal government would use the funds raised by the taxes on programs other than providing rural Americans with access to reliable broadband speed. However, those who support the tax point to the telephone tax, which was used to help bring service to rural Americans in the 20th century."I think it's part of a greater cause," Monmouth, Oregon city manager Scott McClure told the news provider. "That's how we did phone service. That's how phone service was taken care of in this country - through the universal service fund: People pay a little bit more to help the rural areas."The original purpose of the Federal Excise Tax on telephone service was to fund the Spanish-American War in 1898. However, as the telephone became a vital part of the American personal and enterprise culture, the government redirected the funds to improve access throughout the country, according to the New York Times.