Next year could get off to a fiery start for the California Public Utilities Commission (CPUC), which in January will consider a plan by state regulators to charge mobile phone users an additional fee for text messaging, in order to better support making phone service available to low-income residents.
A recent CPUC report that laid the groundwork for a texting surcharge indicated the Public Purpose Program budget had risen from $670 million in 2011 to $998 million last year, the San Jose Mercury News reported. But the program’s means of support, telecommunications industry revenues, have fallen from $16.5 billion in 2011 to $11.3 billion in 2017. The report called the model “unsustainable over time,” and said texting surcharges would boost revenue to programs helping the poor afford telephone 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. Generally, those consumers who create greater texting revenues may pay a bit more, whereas consumers using more voice services may pay less,” CPUC spokeswoman Constance Gordon said in a statement.
The exact amount of the potential charge to customers isn’t clear, the Mercury News’ John Woolfolk reported, noting it could be billed as a flat surcharge per customer. Business groups including the Bay Area Council, California Chamber of Commerce and the Silicon Valley Leadership Group estimated it could cost wireless users $44.5 million annually. The business groups also pointed out that under the proposal, a surcharge could be applied retroactively for five years, costing California consumers more than $220 million.
The plan is already facing somewhat stiff headwinds. The business groups called the retroactive surcharge “an alarming precedent” and Jim Wunderman, president of the Bay Area Council, a business-sponsored advocacy group, termed it “a dumb idea.”
“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,” Wunderman told the Mercury News.
The Cellular Telecommunications Industry Association (CTIA), which represents the U.S. wireless communications industry including major carriers, said texting is more like email — an information service — than it is like a telecommunications service that would be subject to the commission’s authority, in legal filings to the commission. The Federal Communications Commission was expected to affirm that today, the CTIA said, adding that would determine the CPUC “has no authority to impose surcharges on text messaging,” the newspaper reported.
The wireless industry has also argued a texting surcharge would unfairly disadvantage major carriers compared to messaging services like Facebook Messenger, WhatsApp, Skype and others. And in a letter to the CPUC urging it not to consider the idea, business leaders and others opposed to the plan pointed out wireless users already pay a surcharge for the Public Purpose Program.