OMG! Now California wants to tax text-messaging?
State regulators say surcharge on text messaging would help fund programs that make phone service accessible to the poor
Texting your sweetheart that you’re on your way home? California may soon charge you for that.
This is no LOL matter, critics say.
State regulators have been ginning up a scheme to charge a fee for text messaging on mobile phones to help support programs that make phone service accessible to the poor. The wireless industry and business groups have been working to defeat the proposal, now scheduled for a vote next month by the California Public Utilities Commission.
“It’s a dumb idea,” said Jim Wunderman, president of the Bay Area Council business-sponsored advocacy group. “This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have.”
It’s unclear how much individual consumers would be asked to pay their wireless carrier for texting services under the proposal. But it likely would be billed as a flat surcharge per customer — one of those irksome fees at the bottom of your wireless bill — not a fee per text.
Business groups, including the Bay Area Council, California Chamber of Commerce and Silicon Valley Leadership Group and others opposing the idea, calculated the new charges for wireless consumers could total about $44.5 million a year.But they add that under the regulators’ proposal the charge could be applied retroactively for five years — which they call “an alarming precedent” — and could amount to a bill of more than $220 million for California consumers.
A dense California Public Utilities Commission report laying out the case for the texting surcharge says the Public Purpose Program budget has climbed from $670 million in 2011 to $998 million last year. But the telecommunications industry revenues that fund the program have fallen from $16.5 billion in 2011 to $11.3 billion in 2017, it said.
“This is unsustainable over time,” the report says, arguing that adding surcharges on text messaging will increase the revenue base that funds programs that help low-income Californians afford phone service.
“From a consumer’s point of view, surcharges may be a wash, because if more surcharge revenues come from texting services, less would be needed from voice services,” said CPUC spokeswoman Constance Gordon in a statement. “Generally, those consumers who create greater texting revenues may pay a bit more, whereas consumers using more voice services may pay less.”
Wunderman said he’s unaware of any other local, state or federal program that taxes texting. And the wireless industry has argued the state commission even lacks legal grounds for doing so.
The CTIA, which represents the U.S. wireless communications industry including AT&T Mobility, Sprint, T-Mobile, and Verizon, said in legal filings to the commission that texting is an information service like email, not a telecommunications service subject to the commission’s authority.
The Federal Communications Commission is expected to affirm that Wednesday at a meeting, the CTIA said, which would confirm that the state utilities commission “has no authority to impose surcharges on text messaging.”
“Subjecting wireless carriers’ text messaging traffic to surcharges that cannot be applied to the lion’s share of messaging traffic and messaging providers is illogical, anticompetitive, and harmful to consumers,” the CTIA said in its filings.
In a letter to commissioners urging them to drop the plan, business groups and other critics added that wireless customers already pay a surcharge for the Public Purpose Programs, which they said “are healthy and well-funded, with nearly $1 billion in the budget.”
But the commission in a proposed decision by an administrative law judge concluded “in principle that the commission should assess Public Purpose Program surcharges and user fees on all text messaging services revenue” and that it has the necessary authority to do so.
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