Phone Bills Slammed with New Taxes, Mystery Fees
gfn.com
September 18, 2002
Paul Adam Haber
We love to gab – and it shows. From West Hollywood to South Beach, take a stroll down the street and it's clear that mobile phones have become a new appendage for the gay community, where bigger, for once, isn't better.
What we don't love are our bills, stacked with baffling charges and surtaxes, driving our monthly fees up a whopping 23 percent in some states. If this wasn't a "regulated" business one might wonder if Tony Soprano hadn't expanded his empire to include cell phones and long distance plans.
One Man's Bill is Another Man's Outrage
Let's look at a typical bill (my very own, in fact):
I have an inexpensive plan with Sprint: 300 anytime minutes, which includes long distance, and the first incoming minute is free (a lovely perk Sprint quietly did away for new customers once they figured out giving something away for free just wasn't profitable…surprise!)
For this plan I should pay $30 a month. But I don't. I pay over 20 percent more than that when taxes, surcharges and "fees" are added in.
Take a gander at your own bill and you'll see similarly incomprehensible charges for: "Excise Tax," "County Surcharge," and "Special Fee."
What is an "Excise Tax" you ask? You'll find this on all local, long-distance and wireless telephone bills. It was first imposed in 1898 (that's not a typo) as a temporary tax on telephones, which were then considered a luxury item. The money from this tax was used to fund the Spanish-American war 104 years ago.
So, even though the tax was described as "temporary" we're still paying for it and will, one presumes, continue to pay in perpetuity. I had no idea the Spanish-American war was such a pricey affair.
Numerous lawmakers have tried to eliminate the tax over the years, by the way, but the efforts have always run aground, although the "why" remains a mystery as old as Rose Marie's hair.
Other Taxes We Pay for Services We Don't Get
In June, Rhode Island more than doubled its E-911 tax, which is intended to pay for equipment that tracks emergency calls from cell phones, to $1 from 47 cents. Hopefully, Rhode Island will be more successful than New York in justifying this exorbitant tax hike.
A New York comptroller audit earlier this year found that none of the 20 different 911 call centers operated by the state police was capable of determining a wireless caller's location. Still, New Yorkers paid this tax – and got nothing for it.
In fact, dozens of states have levied the 911 surcharge, only to report terrible stories of people who called for help from their mobile phones but expired before workers could find them.
Prince George's County, Md., began levying a new 8 percent charge on all wireless and residential phone bills in July. Not to be outdone, New York recently allowed county governments to add a new local wireless surcharge on customers. So far, about one-third of the state's counties have imposed it.
So, while carriers tout their latest low per-minute and per-month charges, the government is undercutting these savings with taxes to pay for vital programs like 911 call centers that don't work and wars that ended over 100 years ago.
It's Not Our Fault
For their part, the phone companies say their hands are tied - they are simply the innocent vehicles for government levies. "We don't impose these taxes -- we just pass them along," Rochelle Cohen, a spokeswoman for AT&T Wireless told The Wall Street Journal.
"It's not like we're keeping this money," Sprint spokeswoman Angie Makkyla told the Journal.
Before you whip out your hanky to shed a tear for Ms. Makkyla and Sprint, let's take a look at one of their latest addition to Sprint customer bills.
Last year, Sprint began levying a Carrier Property Tax of 1.08 percent of all interstate and international calls. What is that?
The company said the fees allow the company to recover a portion of its property taxes. But shouldn't the basic cost of doing business be included in the price the company is already charging? Sprint says it has simply chosen to break out all of the fees and taxes for clarity purposes.
Hey, thanks for clarifying… but no thanks for the tax.
No Other Options And No Recourse
Telecom bills are almost entirely free of government regulation. If we get angry over the status quo, there's virtually no recourse.
The Federal Communications Commission, or FCC, requires companies to offer customers a toll-free number to call if they're confused over their bills. However, the agency has neither any control over what charges appear on a bill, nor any power to lower the charges. Consumers who don't get a pleasing explanation for their confusion are, however, allowed to file a complaint with the FCC.
Telecom industry experts report that it requires a lot of paperwork to file a complaint, and few customers take advantage of the option.
Where the complaint goes from there is a mystery. Perhaps the sagely legislators who levied the "luxury" tax on our phones know.
Tin cans and string, anyone? |
