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Wireless Providers to Pay Universal Service Fees?
andyo writes "Mailing lists are abuzz with the news that
wireless Internet providers may have to pay fees to support plain old telephone service.
My own perspective is at the O'Reilly Network." The Universal Service Fees are taxes set up long ago to assure that telephone service was provided to everyone, even people who it would normally be uneconomical to serve. The theory is a good one, the execution maybe not. (Maybe if the fees went towards Universal Broadband?)
The biggest problem with Uiniversal Service Fees is that there is no oversight with regards to how phone companies collect them. The FCC recommends rates that telephone companies should use to collect these fees (6.9187% for fourth quarter of 2001 and 6.8086% for first quarter of 2002) but allows telephone companies to set their actual percentages to anything they want. Qwest is already collecting 8.1462% from their DSL subscribers, in addition to rates collected on POTS service, not because it's mandated, but BECAUSE THEY CAN. When they collect more than they need, they pocket it rather than lower the rate. Take a look at your phone bill, people. Then call your state's utilities commission and bitch about it.
Most companies trey to pass costs on to their customers in some way, of course, but this is more than that. The fee actually appears as a separate item on the phone bill, and is never included in the advertised prices. Customers don't know how large it will be until they get the bill (and with a cell phone, the long contract length makes it then too late to change).
What's even worse is that many phone companies actually like to collect this tax, because a loophole in the law allows them to tack on an arbitrary collection fee (pure profit), which is not distinguished from the tax itself on the bill. This makes the tax appear to be even higher than it really is.
It's exactly the same as if the grocery store decided to charge you double sales tax, and you didn't find out about it till after you got your receipt.
Bill Gates pays income tax on something like $325,000 a year, and probably has enough deductions to whittle it down to about $1.50. Now, when he cashes in stock he gets hit with capital gains, and when he buys stuff he gets a sales tax and maybe a luxury tax, but he (and those like him in the top percentages) pay very little taxes. And Microsoft pays nothing.