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Proposed Tax on MD Internet Providers Could Close Broadband Gaps

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Thursday, July 30, 2020   

ANNAPOLIS, Md. -- With many people needing internet service more than ever during the pandemic, a Maryland economist is recommending an extra tax on internet service providers, to get them to offer better access across the state.

Anirban Basru, chairman of the Maryland Economic Development Commission, told fellow commissioners this week the tax would be an inducement for broadband firms to help to close the digital divide.

He pointed out it's not just rural areas of Maryland that don't have broadband. Some big-city neighborhoods also have been left off the internet grid.

"There are many parts of the city of Baltimore, for instance, that do not have broadband access," Basru said. "And as it turns out, much of this absence of broadband access can be found, predictably, in West and East Baltimore. Again, not fair along social justice and other dimensions."

Gov. Larry Hogan has provided at least $25 million in federal and state funds to improve urban and rural broadband since the COVID-19 crisis began. But many communities still lack service, or can't afford the monthly cost, even if it is available.

Basru said internet providers have a disincentive to extend into rural areas because they aren't likely to recoup their investment. He said he isn't proposing the tax to raise revenue, but to induce companies to invest in less densely populated areas and in poorer communities.

"This is the bargain: In order for a broadband access supplier to enjoy access to the densely populated markets in Montgomery County, they have to invest significantly in rural areas, or they will be subject to the tax I have proposed," Basru explained.

Basru hopes policymakers will consider his tax suggestion, especially as the pandemic has made lack of internet access more dire.

Last year, a report from the Maryland Task Force for Rural Internet found more than 324,000 Maryland residents still lack broadband access.



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