Regulators in California have come up with a proposed plan to raise more money to pay for expanding internet connectivity in the state by adding a text message surcharge to residents’ phone bills.
The plan has been brought up by the state’s Public Utilities Commission, which would add a monthly text message-related fee to users’ bills. However, passage is far from guaranteed, as the measure faces several headwinds and other complexities that will make passage a challenge.
First, industry trade groups like the CTIA, which represents carriers like AT&T and Sprint, have come out against the bill. A CTIA executive today put out a statement that the measure would place an unfair burden on consumers who need to be able to text without being encumbered by more fees and taxes.
"We hope that the CPUC recognizes that taxing text messages is bad for consumers." – Jamie Hastings, SVP of External & State Affairs. See full statement: https://t.co/dewP3BgBeL pic.twitter.com/jenPla5L9T
— CTIA (@CTIA) December 13, 2018
Even more interesting, another potential headwind for this measure is a new Federal Communications Commission ruling in recent days that classifies text messages as a so-called “information service,” similar to email. Supporters of that rule, notes a CNN report, say “it will give carriers the ability to crack down on spam messages, and critics say it could lead to carriers censoring messages.”
What’s more, however, the CTIA has submitted a legal filing arguing that classifying texts as an “information service” means that California’s Public Utilities Commission wouldn’t have power to add taxes onto them. And as it stands now, the trade group says the proposed measure would set up an unfair dynamic between text messages offered by wireless carriers and Internet-based messaging services whose products are used like texts — WhatsApp and iMessage, for example.
Part of this has to do with people using their phones less and less for actual voice calling and more for other things, like texting and surfing the web. The federal government and the states back in the 90s established something called Public Purpose Programs, which levied a surcharge on cell phone usage to pay for benefits for low-income people. As Engadget notes, “because people use their phones for voice calling a great deal less now, revenues for PPP have fallen by around a third. The budget for subsidizing low earners, however, has risen by almost 50 percent. The (Public Utilities Commission) reckons that by including texts within the PPP (which would be convenient, as texting shares the same infrastructure as voice calling), it could raise $44.5 million a year.”