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OMG! A Tax on Texts?

CPUC Considers Surcharge

KCBS Radio Morning News
December 12, 2018 - 7:02 am

SAN FRANCISCO (KCBS Radio) -- State utility regulators are considering a tax on text messaging services.

In a lengthy decision, a state administrative law judge concludes that the California Public Utilities Commission has the authority to impose such a tax.  The matter has been placed on the agenda for the CPUC's December 13th meeting.

State regulators say revenue from a text tax would support the Public Purpose Program, a fund created to pay for telecommunications services for the poor.  That program's budget  increased from $670 million in 2011 to $998 million in 2017, while telecommunications industry revenues that fund the program have declined by more than 30 percent. 

The CPUC report argues "this is unsustainable over time."

The telecommunications industry is opposing the possible taxation of texting, arguing that text messages represent an "information service," like e-mail, rather than a "telecommunications service," and are thus outside the CPUC's authority.

But the CPUC plans to proceed, arguing "it is not necessary to classify text messaging as either a “telecommunications service” or an “information service” under the (federal Telecommunications) Act prior to determining whether the Commission should assess surcharges on text messaging services."

However the debate turns out, observers say it's unlikely that a text tax would be applied on a per-message basis. Instead, it would probably be tacked on as an additional charge on monthly cellular bills.