California considers text messaging tax to fund cell service for low-income residents

California may soon charge its residents a fee for text messaging, according to a report released by state regulators Tuesday.

The report from the California Public Utilities Commission (CPUC) says the tax on text messaging would likely be a flat fee added to a monthly bill instead of a per text tax and the money would be used to fund programs that make phone service available for low-income residents.

Business groups in the state and wireless carriers are against the proposal.

ADVERTISEMENT

“It’s a dumb idea,” Jim Wunderman, president of business advocacy group the Bay Area Council, told the San Jose Mercury News. “This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have.”

The report outlines the shrinking revenue coming from a current tax on the telecommunications industry and argues that a new tax on text messaging should be put in place to make up for it.

“From a consumer’s point of view, surcharges may be a wash, because if more surcharge revenues come from texting services, less would be needed from voice services,” CPUC spokeswoman Constance Gordon said in a statement. “Generally, those consumers who create greater texting revenues may pay a bit more, whereas consumers using more voice services may pay less.”

California’s Public Purpose Program charges residents a surcharge on utilities, including landlines. The program’s budget has grown from $670 million in 2011 to nearly a billion dollars in 2017, according to the Mercury News. At the same time, revenues from the telecommunications industry that fund the program have decreased sharply.

“Parties supporting the collection of surcharges on text messaging revenue argue that it will help preserve and advance universal service by increasing the revenue base upon which Public Purpose Programs rely. We agree,” the report states.

The CTIA, which represents major carriers in the wireless industry, said the tax is anti-competitive and would put carriers at a disadvantage against social media messaging apps from tech companies such as Google and Facebook.

CPUC is expected to vote on the proposal in January 2019.