USA Today amplified a misleading op-ed claiming that proposed net neutrality regulations could cost consumers $15 billion in new user fees and taxes, a number that has been called into question by advocacy groups for faulty assumptions.

On December 12, USA Today ran an op-ed by Progressive Policy Institute's Hal Singer and Brookings Institute's Robert Litan promoting their conclusion that a vote by the FCC to reclassify the Internet as a public utility under Title II of the Communications Act could cost consumers “a whopping $15 billion in new user fees to consumer bills.” The authors claimed that "[o]nce Internet access service is labeled a 'telecommunications service' under Title II, consumer broadband services could become subject to a whole host of new taxes and fees."

Singer and Litan admitted that “the Internet Tax Freedom Act pending in Congress might limit the impact of some of these taxes and fees” and that the FCC could limit service fees to consumers, but argued that such moves are unlikely and would not limit the impact of all fees.

The paper published the authors' claims despite the fact that their calculations have been criticized for relying on faulty assumptions. The nonpartisan open Internet advocacy group Free Press estimated that FCC limits and the Internet Freedom Act would reduce possible fees associated with net neutrality reclassification by nearly 75 percent, to $4 billion. The group called the notion that Internet reclassification would amount to more than $15 billion in new local, state, and federal taxes an unlikely “worst-case scenario” that fails to account for how net neutrality works in practice, as it ignores “the difference between services that cross state lines and those that exist entirely within one state”:

If the FCC reclassifies broadband access as a Title II service, it will also (based on precedent) declare that broadband is a purely interstate telecom service. Because broadband access is interstate and not intrastate, none of the intrastate taxes or special telecom fees would apply. The only taxes that could apply would be state sales taxes levied on interstate telecom services. Even if you used PPI's fuzzy math, this would amount to approximately $4 billion in total, nowhere near the $15 billion sum Singer and Litan cite.

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On the matter of new federal and state USF fees, the FCC could decide to waive the requirement for providers to contribute a portion of their retail broadband revenues to the federal USF. The Commission could do this because a cost-benefit analysis might show that the additional fees would depress overall broadband adoption among poor and elderly communities -- which would go against the USF's very mission.

In fact, the eleventh-hour spending bill passed by the House on December 11 (and expected to pass the Senate) renewed a ban on state taxation of Internet sales and services to protect consumers from imposed fees.