Consumer-Powered Opposition Grows to USF Tax Plan Pushed by Phone Industry Lobbying Group; Shifting of Federal Phone Tax Burden to Backs of Seniors, Latinos and Others Hit as "Unfair" and "Regressive".
WASHINGTON, D.C. - The momentum against anti-consumer changes to the federal Universal Service Fund (USF) long-distance phone tax picked up even more speed this week as the ranks of the Keep USF Fair Coalition (http://www.KeepUSFFair.org and http://www.noflatfee.org) grew to include the National Farmworker Alliance (NFA), a coalition of Latino agriculture worker advocacy and service organizations, and the California Alliance of Retired Americans (CARA), which represents more than 100 affiliated groups with 750,000 members.
Linda Sherry, co-chair of the Keep USF Fair Coalition and director of national priorities for Consumer Action, said: "We welcome the National Farmworker Alliance and California Alliance of Retired Americans to the fight to keep the federal USF phone tax fair for all consumers, including the millions of Latinos, seniors, rural residents and low-income Americans who would pay more if the big phone companies get their way. The need for more consumer voices in the movement to keep USF fair hit home this week when Verizon, relieved from paying USF on DSL, chose to add a new DSL fee of about the same amount."
National Farmworker Alliance Chair Lupe Martinez said: "The National Farmworker Alliance joins major Latino organizations -- including one of our most important members, the League of United Latin American Citizens (LULAC) -- that already are speaking out against the phone industry's plan to force an estimated three to five million Latinos to pay more than their fair share of Universal Service Fund taxes. This is a huge pocketbook issue for Latino consumers, particularly those who are less fortunate. We are proud to be one of the growing numbers of Americans who are opposing anti-consumer USF changes."
CARA Vice President and Legislative Director Jacki Fox Ruby said: "It is estimated that California consumers would pay $582 million more in USF taxes than is now the case under the phone industry's plan for the Universal Service Fund tax. That is obviously a 'wrong number' for consumers in California, particularly when the burden would shift so sharply from high-income/high-volume long-distance callers to low-income/low-volume long-distance users. Our message to Washington is clear: Hang up now on this anti-consumer plan from the phone industry."
Headquartered in Washington, D.C., the National Farmworker Alliance is the leading coalition of farmworker advocacy and service organizations that promotes improved farmworker housing, education, employment and training services, health, labor law protections and immigration status. Its members include LULAC, the Farmworker Justice Fund, Migrant Legal Action Program, National Council of La Raza (NCLR), Mexican American Legal Defense and Educational Fund (MALDEF), National Association of State Directors of Migrant Education, Association for Farmworker Opportunity Programs, National Migrant and Seasonal Head Start Association, National High School Equivalency Program (HEP)/College Assistance Migrant Program (CAMP), Rural Opportunities Inc., and the Coalition of Florida Farmworker Organizations.
The California Alliance for Retired Americans is a statewide nonprofit organization that unites retired workers and community groups to win social and economic justice, full civil rights, and a better, more secure future for its members, their families and future generations. As an umbrella organization for more than 100 affiliated groups, CARA serves a combined membership of over 750,000 Californians. Its broad-based coalition includes senior centers, tenant associations, retired public employee organizations, trade union retirees, and a variety of other agencies and associations.
Consumer opposition to increasing the USF tax burden on those least able to pay more than their current share of federal phone taxes has grown steadily in the last two years. The Keep USF Fair Coalition has prompted Americans to send more than one million letters and emails to Congress and the FCC in opposition to the proposal to shift from the current pay-for-what-you-use USF tax to the anti-consumer "numbers"-based collection methodology.
On November 17, 2005, the Keep USF Fair Coalition released a report entitled "Losing Numbers: How America's Most Vulnerable Consumers Could Suffer Under Universal Service Fund 'Reform'". That report showed that a numbers-based methodology formula for USF would result in higher federal phone taxes (or forced phone bill hikes) of as much as $707 million for 43 million low-volume long-distance user households in the United States. Of greatest concern within the group of harmed consumers: the most vulnerable of Americans -- 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 numbers-based methodology.
More recently, the Keep USF Fair Coalition reported on February 9, 2006: "Millions of Latino and Hispanic long-distance phone customers in the United States would be socked with higher federal fees on their phone bills under a widely criticized proposal...to force phone users who make few long-distance calls or use pre-paid wireless phones to either start paying or pay more into the Universal Service Fund...Other than older Americans, Latinos and Hispanics account for the largest number of Americans who would end up paying more...Three to five million Hispanic and Latino households in the United States could be included among the 43 million Americans paying more in federal phone fees..."
On July 11, 2006, the Keep USF Fair Coalition urged the so-called "USF by the Numbers Coalition" (which consists entirely of phone companies and their membership organizations) to publicly disclose how many millions of their customers would end up paying higher Universal Service Fund long-distance phone taxes if the collection methodology for the Fund is changed to the industry-backed formula. To date, the industry's "USF by the Numbers Coalition" has not responded to this request for basic information about the anti-consumer impact of the industry proposal.
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ABOUT THE KEEP USF FAIR COALITION
The Keep USF Fair Coalition 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 145,000 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, California Alliance of Retired Americans, Consumer Action, Gray Panthers, Latino Issues Forum, League Of United Latin American Citizens, Maryland Consumer Rights Coalition, National Association Of The Deaf, National Consumers League, National Farmworker Alliance, 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.
CONTACT: Ailis Aaron, (703) 276-3265 or aaaron@hastingsgroup.com.
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