WASHINGTON, D.C. (September 28, 2006) Two leading U.S. consumer groups – the 107-year-old National Consumers League (NCL) and the Utility Consumer Action Network (UCAN) – are the newest additions to the ranks of the Keep USF Fair Coalition (http://www.KeepUSFFair.org and http://www.noflatfee.org).  The Coalition and its members oppose shifting the Universal Service Fund (USF) fee on long-distance phone service to a regressive, anti-consumer flat tax that would be particularly burdensome to senior, Latino and low-income Americans.

National Consumers League President Linda Golodner said:   “Today’s Universal Service Fund fees charge consumers based on the long-distance they use and that is the approach that makes sense.  Imposing a flat tax fee on all phone consumers would be both regressive and burdensome, particularly on those who escape the USF tax because they can’t afford to make long-distance calls.   Charging billionaires and retirees on a fixed income the same thing for USF makes no sense whatsoever in terms of good consumer policy.”

Dr. Sue A. Macomber, director of Consumer Telecommunications & Education of the Utility Consumer Action Network, said:  “UCAN has long been concerned about phone company manipulation of the fees, taxes and other charges buried in the fine print of telephone bills.   The history of the USF has been one of companies playing a lot of games at the expense of consumers.  The proposed changes to the Universal Service Fund would just take this problem and make it even worse.   Obviously, we are concerned by the estimates that California consumers would pay almost $600 million more in USF taxes than they do currently if a ‘numbers’ or ‘connections’ formula was imposed.”

Maureen Thompson, executive director of the Keep USF Fair Coalition, said:  “We welcome the National Consumers League and the Utility Consumer Action Network 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 FCC has taken encouraging steps in recent months to increase the wireless safe harbor, adding VoIP contributions to USF and exploring the reverse-auction alternative.   The Commission is on the right track when it ‘tweaks’ the current system, rather than making radical changes that would hurt millions of low-volume, low-income consumers.  To that end, our first priority going forward should be on making sure that USF dollars are actually going to the people who deserve it, and are being spent in the way that Congress intended.”

The mission of the National Consumers League (http://www.nclnet.org) is to protect and promote social and economic justice for consumers and workers in the United States and abroad. The National Consumers League is a private, nonprofit advocacy group representing consumers on marketplace and workplace issues. Founded in 1899, the National Consumers League is the nation's oldest consumer organization. NCL provides government, businesses, and other organizations with the consumer's perspective on concerns including child labor, privacy, food safety, and medication information.

Since 1984, the mission of the Utility Consumer Action Network (http://www.ucan.org) has been to educate and protect San Diego County and other California consumers of essential energy, utility, telecommunications and financial services. UCAN also addresses privacy issues through its Privacy Rights Clearinghouse Project.  UCAN has been advocating on behalf of San Diego (and the state's) consumers since 1984.   It has taken the lead on local San Diego-related energy issues as well as been involved in state-wide and national debates on energy and telecommunications policy. 

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.

Last year, 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.

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 its proposal.

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, 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 Wolf, (703) 276-3265, or aaaron@hastingsgroup.com.