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Georgia HB 1049 needs to clarify definition of retail transaction

Posted March 4th, 2012 in wireless communications and tagged , , , by Alton Drew

Georgia bill HB 1049 calls for a $.75 charge per retail transaction for pre-paid wireless services. I don’t have a problem with funding E-911 services with a monthly charge per line, but the bill as written isn’t clear about what exactly classifies as a retail transaction.

The bill defines retail transaction as the purchase of pre-paid wireless service from a seller for any purpose other than resale. It’s the any purpose that gets me. The only legitimate purpose should be prepaid voice services. Until public safety networks are capable of receiving and relaying instant messaging or e-mail, I see no other purpose for assessing a charge that funds E-911 services but for the voice portion of the service. Because of the way text, voice, and video are bundled, however, other pre-paid services will get lumped in regardless.

So why is my local phone service still so high?

I got distracted while researching an article about universal service funding for broadband. In particular I was curious about the overall increase in the price for residential telephone services.

While the monthly charge portion of consumer bills increased 24% between 1986 and 2007, government mandated fees, charges, and taxes increased by triple digits over the same period. For example, the subscriber line charge increased by 181% between 1986 and 2007. The SLC is assessed in order to recover the cost of making the long distance network available to consumers.

Consumers saw E-911 fees and other taxes increase by 275% between the same time period. Yes, you heard right. Two-hundred seventy-five percent. In addition, E-911 and other taxes and fees made up a substantial portion of consumers overall telephone bills. This portion of the bill was approximately 17% in 2007, compared to approximately nine percent in 1986.

Would we have needed a universal service fund financial scheme for increasing access to local phone service had we gotten rid of or at least greatly reduced these taxes?