CALIFORNIA: Are You Ready to Pay $184M More in Phone Taxes?
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| Big phone companies and some in Congress want to change the federal "Universal Service Fund" fee on your phone bill from a percentage of long-distance use to a flat monthly fee. That means more taxes for you and other consumers in California. Today, California consumers are already paying roughly $613 million into the USF. Under the proposed changes, you and other Golden State consumers will pay a minimum of $184 million more than you do now!
California Coalition Advocate Groups
Latest News: USF in California
Cal. consumers stand to lost the most if the FCC shifts to a numbers- or connections-based USF contribution, the Keep USF Fair Coalition said last week. The higher the fee, the bigger the hit, the coalition said. The change in method would also hurt consumers in other large states, including Tex., Mass., N.Y. and Ill., it said: "Californians currently pay $613.11 million in USF taxes and get back only $575.75 million in USF expenditures. Under the $1.50 per-connection tax switch for USF, the California 'deficit' would soar to $582.43 million from $37.35 million." (State Telephone Regulation Report, 09/22/2006)
The groups, including the Consumer Federation of California, the California Alliance for Retired Americans, and the Keep Universal Service Fund Fair Coalition, said that California would be the "worst-off loser" state under one of the proposals to restructure the universal service fund being considered by the FCC. Under the proposal, backed by several telephone companies including BellSouth, Corp. and Verizon Communications, Inc., consumers would pay a flat fee per line or connection instead of a fee based on the amount of telephone service they use.
The groups specifically said yesterday that the line-based funding mechanism could cost California residents up to $582 million a year in additional fees. "We do support a universal service fund, but that certainly does not mean that we want to see the funding shift to a system that disadvantages California seniors, rural residents, Latinos, the poor, and others," said Richard Holober, executive director, Consumer Federation of California. "These are the very groups that always get the short end of the stick when something changes in Washington." (TR's State Newswire, 09/14/2006)
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