Half a Million Emails and Letters Sent by Consumers Opposing USF Tax Increase Backed by FCC Chairman
Growing Backlash Is Funneled Through Keep USF Fair Coalition Web Site;
Martin Proposal Would Increase Taxes $700 Million on 43 Million Households
WASHINGTON, D.C. – December 6, 2005 – Concerned consumers have sent a total of 562,911 emails and letters to officials in Washington in opposition to an expected proposal from Federal Communications Commission (FCC) Chairman Kevin Martin to increase Universal Service Fund (USF) federal phone taxes by as much $700 million for 43 million American households, including 16 million low-income and senior households that currently make few or no long-distance calls. The growing consumer backlash against the change in USF collections is finding its focus through the Keep USF Fair Coalition Web site at http://www.keepusffair.org.
Linda Sherry of Consumer Action, co-chair of the Keep USF Fair Coalition, said: “If Congress wants to increase federal phone taxes on 43 million people, let them do it in the open with hearings and a vote where they can be held accountable. Our coalition and the consumers who have joined us see no need for the FCC to abandon the current pay-for-what-you-use USF tax for a system under which 16 million people would face an increase even though they use little or no long distance.”
Coalition Executive Director Maureen Thompson said: “Americans are speaking out loud and clear against this stealth FCC tax hike. This is an open-and-shut case of an anti-consumer tax hike that is why tens of thousands of Americans are taking the time to weigh in against it.”
On November 17, 2005, the Keep USF Fair Coalition released a report showing that Martin’s plan would result in higher federal phone taxes (or forced phone bill increases) of as much as $707 million for 43 million low-volume long-distance user households in the United States, including 16 million households of primarily low-income and elderly individuals – who currently can afford few or no long-distance phone calls, but would have to pay up to $383 million in higher USF taxes under the Martin plan. To read the report, go to http://keepusffair.org/KeepUSFFair/news-media-event.html on the Web.
One of the citizens who has spoken out against the Martin plan is Juanita Brown, a disabled nurse living on a fixed income in Lookout, West Virginia. Speaking at a KUSFF Coalition news event on November 17, 2005, Ms. Brown said: “I can barely afford long distance as it is now. I depend on my phone to stay in touch with my children and grandchildren. On my fixed income, I have to worry about keeping a roof over my head and paying for the heat, so the last thing I want to think about is having to give up my long-distance service because the rates have been jacked up by the federal government. I am here today to ask that I don’t get socked with a charge I can’t afford for telephone calls that I haven’t even made. Where is the fairness in that?”
The Coalition letter from consumers reads (subject to changes made by senders): “If the FCC changes ﾿ to a flat fee, someone who uses 1,000 minutes a month of long distance, pays the same amount into the fund as someone who uses zero minutes of long distance a month. A flat fee tax could cause many low-volume long distance users, like students, prepaid wireless users, senior citizens and low-income residential and rural consumers, to give up their phones due to unaffordable monthly increases on their bills. Shifting the funding burden of the USF from high volume to low-volume users is radical and unnecessary.”
Keep USF Fair Coalition members and other groups concerned about the threat posed to America’s most vulnerable consumers by a “numbers” based approach are uniting around the “Fair Share Plan,” which would eliminate the need for radical changes that would be injurious to vulnerable consumers. The Plan assumes the following, common-sense reforms to improve the USF contributions process to ensure sufficient funds:
- Expand the USF contribution base to include revenues derived from all telecommunications, including services provided using Voice over the Internet Protocol (VoIP) technology.
- Establish a contribution factor cap to be applied to the revenue-based approach, e.g., somewhere between 12 and 15 percent of revenues derived from interstate telecommunications (including VoIP).
- Carriers would still be assessed based on revenues up to that cap amount, and would still have the right to charge their end users a USF recovery charge not to exceed the capped amount.
The Fair Share Plan would benefit those low-income users who make few interstate calls. They would be subject to flat assessments for their wireline and wireless telephone numbers, but the level of those assessments would be measured in cents, not the $1.00 or more anticipated under a "connection" or "numbers" based funding plan.
ABOUT THE COALITION
The Keep USF Fair Coalition (http://www.keepusffair.org) is committed to keeping the Universal Service Fund collection method fair, and opposing proposals to move to a regressive, per-line flat fee. Now counting more than 111,000 members in its ranks, The Keep USF Fair Coalition was formed in April 2004. Current members include Alliance for Public Technology, Alliance For Retired Americans, American Association Of People With Disabilities, American Corn Growers Association, American Council of the Blind, Black Leadership Forum, Consumer Action, Deafness Research Foundation, Gray Panthers, Latino Issues Forum, League Of United Latin American Citizens, Maryland Consumer Rights Coalition, National Association Of The Deaf, National Grange, National Hispanic Council on Aging, National Native American Chamber of Commerce, The Seniors Coalition, Virginia Citizen’s Consumer Council and World Institute On Disability.
The NAACP is a supporter of the Keep USF Fair Coalition, and is among the many national organizations that have filed comments with the FCC in support of a non-regressive USF collection method. Keep USF Fair also has received support through a resolution passed in 2005 by the National Association of Consumer Agency Administrators (NACAA). The resolution recognizes that a "restructuring effort of the Universal Services Fee must find a fair method, competitively neutral, that takes into consideration new technologies," and says that a "flat fee or exclusively numbers-based plan would be unfair to millions of consumers, especially lower call volume users if they would now pay the same fee as high volume, business users." |
