State regulators proposing to tax text messages to support phone services for the poor

WALNUT CREEK, Calif. (KTVU) - Taxing your texting – the California Public Utilities Commission is proposing a plan to charge a fee for text messaging on cell phones

The surcharge rate is less than seven percent currently for telephone services. So for every $10 of text revenues – it would cost about 70 cents. The Mercury News reports a charge like that could bring in $44 million a year from wireless users.

The CPUC wants to clarify rules on whether texting revenues are surchargeable or not – the pending draft proposal commissioners are going to vote on in January concludes it is OK to tax.

In the 1990s, the federal government and states created “public purpose programs,”
charging people a fee for telecommunication services - like talking on a landline phone.

That money helps fund programs to make phone services more accessible for those who are low income. This new proposal would extend that existing tax to cover text messages.

The CPUC says if more surcharge revenue comes from texting – less will come from voice services. And if texting surcharges aren’t collected to fund programs - more would come from voice services. 

The CTIA which represents the US  wireless communications industry argues texting is not a telecommunications service that can be regulated by the commission but rather an information service like email.

The California Chamber of Commerce, the Bay Area Council, TechNet and the California Taxpayers Association, all called the proposal unnecessary in a letter to the CPUC: “This [proposal] will result in the state unnecessarily relying on a legally dubious funding source when there are legally sound mechanisms available to ensure the continued viability of these programs.”

The critics added that the proposal could actually hurt low income wireless users by potentially making them pay the new tax.

On Wednesday, however, some people in Walnut Creek seemed to think the idea might be a good one.

 “You get taxed on every other utility,” said Samuel Schussler. “As long as it was equitable and spread to business and personal perhaps leaning towards business, I’d be OK with it.”

"If it’s really used for what they say the purpose is, that’s a good idea, " said Jan Coconis. "People are using it a lot, abusing it. Maybe if they tax it it could be advantageous in that way." 

The FCC is expected to meet Wednesday on the issue.