SC lawmakers propose tax for cell phone users

SC lawmakers propose tax for cell phone users

MYRTLE BEACH, SC (WMBF) - We've all noticed those fees and taxes tacked on to our monthly cell phone bills, but recently some South Carolina lawmakers are proposing legislation that could add on even more fees to help pay for the services provided by land lines, a proposed law that some major wireless carriers do not favor.

The fees on your cell phone statement are surprisingly not for the wireless carriers, but instead support public programs. One in particular, the Universal Service Fund which was created in 1997, was required by the Federal Communications Commission to ensure everyone in the country has affordable and equal telecommunication services.

Right now some major wireless carriers are fighting this bill to prevent consumers from paying about 1.1 percent more on their bills. They argue the proposed law would make the over 4 million cell phone users in South Carolina pay into a program that does not benefit them.

Michelle Robinson, VP of Government Affairs for Verizon Wireless said, "...Without any proof that they need the money and without any evidence they're going to put the money toward its intended purpose, they would like to see 4 and half million South Carolinians, nearly the whole population of the state, pay more than they're already paying - to us that's not fair."

However, State Senator Luke Rankin, R-Horry County, a sponsor of the bill, said the fees are not exactly taxes, but rather fund for a dated system, that serves and benefits everyone is the state. Rankin said without land lines, wireless calls would not exist.

While everyone, wireless phone and land line users, pay into a federal fund, land line users already pay about 2.7 percent of their bill into the state fund, and cell phone users pay nothing.

State lawmakers say SB 277 would level the field, reducing land line customer tax, and increasing what cell phone users pay, so that everyone pays about 1.1 percent. Cell phone carriers will pay into the state fund the same way traditional phone companies have for years.

"It's all about equalizing the cost for a service that benefits everyone in the state," Rankin said. "When you look at what the Universal Service Fund provides, just like the 911 service in South Carolina, everybody is getting the benefit of that, and everybody is required to pay their fair share."

However, Robinson says it's not fair to the wireless consumer to fund networks that are on the decline, and she says lawmakers are putting it on the backs of consumers because they are preferring other services over those that are dying out."

"When you look at how much taxes and fees are already added on your wireless bill, all of our wireless bills, for those services it's on average about 16 percent of the bill, that's almost double the state's ordinary sales tax for other goods and services, so wireless consumers are already paying well over their fair share," argued Robinson.

The fund, which Rankin says is roughly now at $43 million, subsidizes companies to provide telephone access to rural, high-cost areas, and it gives discounts to low-income households that want phone services.

Last week, several cell phone carriers spoke against the proposed fee. Representatives from several cell phone carriers including Verizon, sent a joint letter to the Senate Judiciary Committee, to recommend killing the bill.

Rankin says they are following what 25 other states are doing they have the same law.

Rankin said the bill has not gone before the subcommittee yet, but that will happen in a few weeks. They will discuss if there is enough support for the bill to take before the Judiciary Committee, which he believes will then move forward.

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