Wash. Post Fact-Checker Shatters Enduring Net Neutrality Myth

Claim That Net Neutrality Comes With $15 Billion Cost To Consumers Given “Three Pinocchios”

The Washington Post's Fact Checker debunked the claim that net neutrality protections could cost American consumers $15 billion in additional taxes and fees -- a favorite conservative argument against net neutrality and one parroted by multiple media outlets -- concluding the estimate contains “significant factual error[s] and/or obvious contradictions.”

Washington Post Fact Checker Debunks Conservative Hype That Net Neutrality Carries $15 Billion Price Tag

Wash. Post Fact Checker: Will The FCC's Net Neutrality Decision Cost Americans $15 Billion In New Taxes? Nope." On January 16, The Washington Post's Fact Checker blog addressed prominent conservative claims that if the Federal Communications Commission institutes proposed regulatory policies to protect net neutrality,consumers will be hit with an extra $15 billion annually in additional taxes and service fees. The $15 billion figure stems from a much-criticized September 2014 policy brief issued by the Progressive Policy Institute, and Fact Checker awarded the estimate “Three Pinocchios,”  saying it contains “significant factual error[s] and/or obvious contradictions” (emphasis added):

It is impossible to quantify the exact impact of the potential FCC decision, since Internet regulation is a new area of policy. New taxes are prohibited as long as the Internet Tax Freedom Act is in effect, so it is inaccurate to say there would be $15 billion in new taxes. There may be state charges and fees, but there is no proof that all of the current fees on telephone services would apply again to Internet services. It will not add up to $15 billion, and likely not add up to $11 billion -- the worst-case scenario. The researchers agree it is a “high-end” estimate, which was the purpose of the report.

There are too many unknowns to alarm consumers who are not well-versed in the technical and legal details of telecommunications regulations and laws. Given the uncertainties, it would be more appropriate to give a range of potential charges. But the researchers did not calculate a low-end figure for the report. In addition, the modification from $15 billion to $11 billion is a 27 percent decrease, yet the change is buried in a footnote and not readily visible for the public.

The more complex the issue, the easier it is for politicians to obfuscate the reality with dramatic numbers. On behalf of the average American consumer, we award Three Pinocchios to the use of the $15 billion figure. [The Washington Post, Fact Checker blog, 1/16/15]

Media Outlets Promoted Misleading "$15 Billion" Cost Claim

Fox News Reporter: Net Neutrality Will Create An Estimated "$15 Billion In New State And Federal Taxes." On the January 14 edition of Fox News' Special Report, correspondent Doug McKelway claimed proposed net neutrality regulations will raise costs, citing  “one cost estimate of $15 billion in new state and federal taxes a year.” [Fox News, Special Report with Bret Baier1/14/15]

USA Today Publishes Op-ed Estimating Consumers Will Shoulder $15 Billion Cost Of Net Neutrality. On December 12, 2014, USA Today published an op-ed by economists Hal Singer and Robert Litan promoting their much-criticized conclusion that instituting net neutrality would cost consumers up to $15 billion, despite the fact that their calculations have been criticized for relying on faulty assumptions. [USA Today, 12/12/14]

Motley Fool: Net Neutrality  “Might Raise Your Internet Bill”  And Create More Than $15 Billion A Year In New Fees. In a December 6 blog post, Motley Fool hyped worries that instituting net neutrality “might raise your internet bill,” uncritically citing the estimate that adopting the proposed rules could create “more than $15 billion a year in new fees.” [The Motley Fool, 12/6/14]

Wall Street Journal: “Obama's New Web Tax” Could Cost Consumers $17 Billion. In a December 4 editorial, The Wall Street Journal attacked what it called “Obama's new web tax” and endorsed the estimate that net neutrality could cost American consumers billions of dollar annually, claiming that the policy could “add a whopping $17 billion in new user fees” -- this total includes both $15 billion in alleged local, state, and federal fees and an additional $1.5 billion in related expenses for another program. [The Wall Street Journal12/4/14]