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Public safety fee on wireless users a challenge for industry

While the industry hates fees, it wants an emergency network

March 25, 2010 05:07 PM ET

Computerworld - The FCC's proposed monthly public safety fee of up to $1 on every broadband user in the U.S. poses a political challenge for the private wireless industry.

On one hand, the industry would like to see the FCC auction off radio spectrum in what is called the D block for private uses; the spectrum could then be shared with emergency groups, as the FCC has proposed in the National Broadband Plan.

On the other hand, the wireless industry hates the idea of adding more user fees, with one industry-backed group, mywireless.org, noting that the average wireless consumer already pays 16% in taxes and fees -- and the average wireless household pays $350 a year in wireless taxes.

In a separate document not on the site, the group put the total of taxes and fees on the average wireless consumer at nearly $600 a year.

The public safety fee, which would be used to support a $16 billion emergency wireless network, was proposed by the FCC in its National Broadband Plan. In that plan, it is described only as a "nominal" fee, although a spokesman recently said it would probably be less than $1 a month. Other officials this week pegged the fee at closer to 50 cents, although the matter is still under discussion and Congress must grant the FCC permission to impose the fee.

The main wireless industry association in the U.S., the CTIA, runs mywireless.org arm, which has organized a lobbying effort to oppose a bevy of state and local taxes and fees on wireless service. So far, the CTIA hasn't taken a public position on the public safety fee, and a spokeswoman said the group is determining whether policymakers want it to replace a fee used to support emergency 911 services.

Asked whether that might happen, an FCC spokesman said today that "details are still being worked out." However, an official familiar with the discussions said the proposed new fee is likely to be separate from the E911 fee, meaning that both would be paid by consumers.

While mywireless.org has collected state-by-state details on wireless taxes and fees, some of the information online appears to be one or two years old when compared with printed information from the group handed out at the CTIA conference.

At its CTIA booth, mywireless.org handed out a chart showing taxes and fees for each state as of June 2009 that concluded that the average consumer pays nearly $50 a month in combined fees and taxes. Washington state is at the top of the list with a combined rate of 23.33%. That figure includes an 18.54% state and local wireless tax rate, plus a 4.79% rate used for the Universal Service Fund (USF), which helps cover the cost of bringing phone service to rural areas. Oregon has the lowest combined rate, 6.48%, with just 1.69% for state and local taxes on top of its 4.79% for the USF, according to the mywireless.org chart.

Raising the USF to help expand broadband access in the U.S. has come under fire by both Republicans appointed to the five-member FCC. But it isn't clear how they, or Republicans in Congress, feel about a fee to fund a public safety network that has wide backing.

Several visitors to the CTIA show who passed by the mywireless.org booth said they understand the dilemma that puts the industry and some policymakers between a rock and a hard place. "You want an interoperable network for emergencies, but yet another fee to pay for it? I don't know," one man said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at Twitter @matthamblen or subscribe to Hamblen RSSMatt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Read more about Mobile/Wireless in Computerworld's Mobile/Wireless Topic Center.



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