A proposal by California regulators to slap a tax on text messages has triggered a backlash by the state's business community.
The Bay Area Council and other high-tech and corporate groups are pushing back against a proposal by the California Public Utilities Commission to levy a texting surcharge on the bills of Golden State consumers, saying it could amount to tens of millions a year in new taxes.
The commission has proposed the charges as a way to raise money for programs that help pay for phone service for poor Californians.
The CPUC has defended the proposed tax, which would amount to about 70 cents for every $10 in text messages, arguing it would not increase the amount paid by consumers in the state, but simply shift some of the charges away from voice services and toward texting.
However, the Bay Area Council contends the proposal could cost consumers $44.5 million a year in text-messaging surcharges. The commission's proposal could be applied retroactively back as far as five years, snowballing at the initial costs to $220 million, the group contends.
A vote on the proposal had been slated for Wednesday, but the CPUC postponed the decision until its Jan. 10 meeting.
"The CPUC was scheduled to hear this thing today but they received a lot of push back from groups like ours and others across the state," says Rufus Jeffris, a spokesman for the Bay Area Council.
"People were surprised - it seemed to come out of the blue," Jeffris says of the proposed text-message tax.
Still, the CPUC contends its proposal was spurred by a request from the telecommunications industry to clarify whether text messages should be included in already-existing surcharges to support phone services for low-income consumers, as well as other public services, such as 911.
In fact, some companies already levy this charge on text messages as well as voice services, says Terrie Prosper, a spokeswoman for the commission. The commission's proposal would require all telecommunications carriers to levy the surcharge on text message revenue and not just on voice services.
The CPUC is now weighing a related decision by the FCC, and may further revise its proposal before taking it up again next month, Prosper says.
For customers of other telecommunications companies that don't currently do this, "the surcharge on text messaging would be new," Prosper says, adding it "could be balanced out if a customer pays less in surcharges on voice calls that today are subject to surcharge."