A California tax on texting? HYH (hold your horses)
EM? ICYMI: A tax on txts? OMG! Srsly?
For those who struggle to decipher texting shorthand, here’s the translation: Excuse me? In case you missed it: A tax on texts? Oh. My. God! Seriously?
HYH (hold your horses). A Federal Communications Commission vote Wednesday might have killed the issue altogether. The FCC ruled that texting is an information service, rather than a telecommunications service. The ruling is subject to interpretation, but industry experts believe it likely takes away California’s legal right to impose the tax.
Even if it does, the issue isn’t likely to go away. The question is not only whether California should have the ability to tax texts — it should — but whether it should do so. Answer: Not unless the state demonstrates a clearer need.
The issue went viral Wednesday after Bay Area Council CEO Jim Wunderman discovered that the California Public Utilities Commission would vote on a text tax at its January meeting.
Commissioner Carla Peterman recently recommended that her colleagues acknowledge what she argues is the PUC’s right to impose the tax.
If Peterman pursues the issue, she will ask the PUC to work with broadband providers on how much to charge, how the tax would be implemented and, hold your breath, whether the tax should be collected retroactively for the past five years.
All told, a tax on texting could cost Californians in the neighborhood of $45 million a year — plus an additional, onetime charge of $220 million if the tax is applied retroactively. The tax wouldn’t be applied per text. It would instead be tacked on as a flat monthly charge.
The concept is hardly new. Federal and state governments have been taxing dial-up telephone users for decades in order to provide funds to ensure phone service availability for rural areas, low-income people, libraries and schools. Phone companies’ first priority is to maximize profits. They need reasonable subsidies to build the infrastructure to serve customers in unprofitable areas.
Those same rural areas, schools and libraries in poorer areas of California are the most likely not to have broadband access. According to Broadband Now, an estimated 959,000 Californians still don’t have any wired internet providers available where they live. The vast majority are in Northern California’s rural areas. About 3.5 million Californians are considered underserved users.
The PUC argues that the texting surcharge is needed to fund its program that provides discounted basic landline and mobile telephone service to low-income customers. A PUC staff report argues that while the program funding has climbed from $670 million in 2011 to $998 million last year, telecommunication industry revenues that fund the program have fallen from $16.5 billion in 2011 to $11.3 billion in 2017.
If it turns out that California can impose a text tax, then, before the PUC takes a step forward, it has an obligation to take its case to the public. Rather than just plow ahead, the commission needs to specify how the revenues would be spent and the benefits that would result.
C’mon, PUC. You should know better than to act unilaterally, FCOL (for crying out loud).