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OMG: California regulators consider charge on text messaging

The wireless industry and business groups have been working to defeat the plan.
Credit: Thinkstock
Student sending text on cell phone in class

SACRAMENTO, Calif. (AP) — California regulators are considering a plan to charge a fee for text messaging on mobile phones to help support programs that make phone service accessible to the poor, according to a newspaper report Wednesday.

The proposal is scheduled for a vote next month by the state Public Utilities Commission, the Mercury News reported.

The wireless industry and business groups have been working to defeat the plan. Some of those opposed have argued that surcharges from the Commission are set to equal the budgets of the Commission, which means the surcharges won’t help preserve or advance service.

"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 money individual consumers would be asked to pay their wireless carrier for texting services under the proposal, the newspaper said. But it is likely would be billed as a flat surcharge — not a fee per text.

The fees go toward Public Purpose Programs, which generally help lower income individuals. In the case of a company like PG&E, their bills include a Public Purpose Program Surcharge which helps provide money for gas assistance programs for low income customers, energy efficiency programs, and public interest research and development.

There are six Public Purpose Programs that have currently been adopted in California which implement the California High Cost Fund A and High Cost Fund B, Universal Lifeline Telephone Services Act, Deaf and Disabled Telecommunications Program Administrative Commission Fund, the California Advanced Services Fund, and the California Teleconnect Fund.

Surcharges for the programs are collected in a couple of ways. One is the All End User Surcharge Mechanism and the Point of Sale Mechanism, which is for surcharges and fees on prepaid wireless bundled service.

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 lacks legal grounds for doing so.

Business groups calculated the new charges for wireless consumers could total about $44.5 million a year. They said that under the regulators' proposal the charge could be applied retroactively for five years — and could amount to a bill of more than $220 million for California consumers.

A CPUC report proposing 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 fell 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," CPUC spokeswoman Constance Gordon said in a statement.


Information from: San Jose (Calif.) Mercury News, http://www.mercurynews.com

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