According to the California Public Utilities Commission (CPUC), funds raised from the text tax will be used to help lower-income California residents to get access to telecommunications services.
The CPUC says that the fee, which would total just 70 cents for every $10 in text messages, is not going to significantly raise the monthly amount paid by consumers in the state. The group, which responsible for regulating public utilities operating in the state, claims the tax would just shift some of the charges away from voice services toward texting.
However, Bay Area Council along with other high-tech and corporate groups have raised voices against the proposal, saying that the text-messaging surcharges would cost consumers $44.5 million a year. According to the opponents, the SMS levy could be applied retroactively back as far as five years, sweeping away some $220 million.
At the same time, the industry representatives argued the state commission lacks legal grounds for introducing the tax of the kind. The wireless industry is reportedly working on a plan to prevent the measure.
“It’s a dumb idea,” said Jim Wunderman, president of the Bay Area Council business-sponsored advocacy group. “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.”
Vote for the proposal was initially scheduled for this week, but the CPUC reportedly postponed it till the next month after getting a lot of push back.
“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.