Higher premium streaming costs for platforms could come from a different direction -- as Netflix, Amazon Prime Video and others could pay into the FCC’s Universal Service Fund that helps support broadband carriage.
Currently, those contributing into the fund include telecommunications carriers -- including wireline and wireless companies -- and interconnected voice-over-internet protocol (VoIP) providers, including cable companies that provide voice service.
Could content providers be next? If that happens, expect more costly and poor-quality streamers, says one report from the Information Technology & Information Association.
This comes as premium streamers are spending billions on TV programming content to lure customers, or to keep them from cancellation.
The Federal Communications Commission has been deciding whether and how to expand those paying into its Universal Service Fund (USF) broadband via what is called its “subsidy” pool.
The report says the FCC needs to find more money because the fund is based only on legacy communication fees from traditional phone service companies -- much of which has been moving to internet-based phone services.
In South Korea, content providers are already paying a set price for delivering content via broadband. The report says this has led to less-efficient internet traffic, higher prices and lower quality. The report says existing funds could be spent more wisely.
It is not only premium streamers that are potentially subject to these costs -- cable and telecommunications broadband providers pay more into the subsidy.
Adding those costs -- possibly to subscribers’ bills --- could potentially work against the ultimate goal of the Biden Administration -- creating the subsidy of making broadband more affordable.
This comes as a notable slowdown has been witnessed among the premium streaming companies -- especially in the pursuit of steady growth in subscribers and revenues.
Your standard $15.49-a-month Netflix ad-free subscription price may climb, and perhaps your brand new $6.99 ad-supported option will tick up as well.