Fergie's Tech Blog

Consumer Groups Question Flat-Rate Telecom Tax Proposal

Grant Gross writes in InfoWorld:

A proposal being considered by the U.S. Federal Communications Commission (FCC) to rework funding for a program that provides telecommunication services to rural and poor areas includes a "regressive" tax that would harm low-income U.S. residents, a coalition of consumer advocates said Thursday.

A new way of funding the controversial Universal Service Fund (USF), which also helps subsidize telephone and Internet access to schools and libraries, could add up to $707 million in new taxes to 43 million U.S. households that sparingly use long-distance telephone service, said members of the Keep Universal Service Fund Fair Coalition during a press conference in Washington, D.C.

Low-income customers and seniors with fixed incomes would be among the hardest hit by a proposal to impose a flat-rate tax of about $1 to $2 a month per phone line, the coalition said. Currently, the USF, which took in $6.4 billion in 2004, is funded through a percentage-based tax on long-distance charges. The percentage, adjusted quarterly by the FCC, is 10.2 percent.

posted by Fergie @ 11/17/2005 12:24:00 PM