Washington – As traditional telecom companies attempt to reduce their obligations to contribute to the Universal Service Fund, which helps defray the costs of serving remote and low-income areas, the Computer & Communications Industry has released a paper on the impact of making cloud services pay into the Fund. The paper synthesizes various research on the economic impact of taxation and regulatory contributions on cloud computing adoption. The study also estimates the impact on the overall GDP and the likely cost to specific states and industry sectors.
The study by Raul Katz at Telecom Advisory Services demonstrates that, “imposing USF fees on cloud computing services will harm U.S. consumers and economic growth across national and state economies. The negative impact would also affect key economic sectors throughout the country.”
According to econometric analysis of a hypothetical 5% USF fee on cloud, “the impact on national GDP is expected to range from a decrease of US$ (-58.88) billion to US$ (-148.18) billion, calculated on a 2024 GDP in constant US$ of 23.54 trillion.”
To watch a live discussion with the author, tune in on Tuesday at 10 a.m. EDT.
The following can be attributed to CCIA Chief Economist Trevor Wagener, who is the Director of CCIA’s Research Center:
“Imposing USF obligations on cloud services makes no policy sense and would have severe consequences, including a 0.13% increase in consumer prices, a $7 billion reduction in capital investment by cloud service providers, and a loss of up to $148 billion in national GDP.”
