I think there is a lot of latte liberal projection around this issue. They want to bring fiber to every poor person, ignoring the fact that a huge percentage of them don't even have computers. What would be much more useful is subsidizing smart phone access for poor people (because that's where computing is headed).
Also, the "how" is really important. Democrats always want to pay for these programs with highly distortionary targeted taxes and cross subsidies instead of general tax revenue. When you target an industry for extra taxes, you disincentivize it. That's why we tax cigarettes and propose to tax sugary drinks. Imagine putting a 16-18% additional tax (the current USF rate) on all cell phones to help pay for cell phones for poor people. That would make cell phones more expensive, reduce cell phone sales and industry revenue and make the industry less of a desirable place to invest.
And the distortionary effect hurts consumers too. For example, Baltimore requires any would-be fiber provider to subsidize access to poor neighborhoods (by mandating providers build into neighborhoods where only a few subscribers will share in the cost of the node). That tanks the economic case for fiber in Baltimore, and as a result nobody gets fiber. And Baltimore is broke, so municipal fiber isn't an option either.
I am not familiar enough with the history of paying for infrastructure by taxes to comment, except to say that sin taxes seem to be more likely to pass then a general tax increase. That said, I think relatively small fees and taxes assessed on items where demand is inelastic probably work fine to promote investment and growth, especially if they were provided directly to municipalities for high speed rollouts and state and federal restrictions were reduced on municipal broadband organisations.
Not sure about Baltimore either, though I wonder if it follows the pattern I've seen in a few other American cities where there is a large urban center surrounded by smaller wealthier townships/suburbs who's residents take advantage of the city as a resource by aren't part of the tax base. Maybe the Balitmore Broadband Coalition will comment though.
Also, the "how" is really important. Democrats always want to pay for these programs with highly distortionary targeted taxes and cross subsidies instead of general tax revenue. When you target an industry for extra taxes, you disincentivize it. That's why we tax cigarettes and propose to tax sugary drinks. Imagine putting a 16-18% additional tax (the current USF rate) on all cell phones to help pay for cell phones for poor people. That would make cell phones more expensive, reduce cell phone sales and industry revenue and make the industry less of a desirable place to invest.
And the distortionary effect hurts consumers too. For example, Baltimore requires any would-be fiber provider to subsidize access to poor neighborhoods (by mandating providers build into neighborhoods where only a few subscribers will share in the cost of the node). That tanks the economic case for fiber in Baltimore, and as a result nobody gets fiber. And Baltimore is broke, so municipal fiber isn't an option either.