Blog | News & Information on Wireless Services & Telecommunications

Empire Follies

Posted: 12/15/09 by Mobile Future Team

Question: What do the following have in common: a state sales tax, a local sales tax, three transportation surcharges, a 911 fee, a utilities tax, an excise tax and a franchise tax?

Answer: They're all state and local fees paid by New York's mobile phone users.

Fortunately, U.S. Rep. Anthony Weiner is among those willing to say, Enough is enough. Weiner tells the New York Daily News that Big Apple mobile users pay 10 state and city taxes and fees - more than any other city in the nation. Combined, he says, this adds about 16 percent to the mobile phone bill. Among U.S. cities, only Chicago adds on a higher amount, with a 19 percent total. 

We've written before about the problem of excessive fees levied on mobile phone service  and bipartisan efforts in Congress to rein these in. Thank you, Congressman Weiner, for standing up for wireless consumers.

The IRS sees the light (or at least the wireless glow)

Posted: 07/02/09 by Molly Kocour

Earlier this week, the IRS announced it will no longer seek to tax "personal use of cell phones provided by employers."  Previously, the agency had considered making 25 percent of the costs for company-issued wireless devices taxable for employees. Understandably, in today's fast-paced environment where many people can't fully perform their jobs without using a wireless device, this idea raised a lot of red flags.

Thankfully, the agency realized that this statute of the tax code is "burdensome, poorly understood by taxpayers and difficult for the IRS to administer consistently," said IRS Commissioner Doug Shulman, and "the passage of time, advances in technology and the nature of communications in the modern workplace have rendered this law obsolete."  

Now, about the rest of the tax code...

A taxing solution

Posted: 06/11/09 by Mobile Future Team

Good news from Washington:

U.S. lawmakers are setting the stage to halt state and local governments from imposing new taxes on cell-phone and mobile e-mail services.  Several Democrats and Republicans on the House Judiciary Committee's commercial law panel agreed Tuesday that "discriminatory" cell-phone taxes, or taxes on wireless services alone, are unfair.

This is good news for many reasons, especially because, as Rep. Zoe Lofgren said yesterday, higher cell-phone taxes disproportionately impact lower-income people, who rely more on their cell phones for access to the Internet.  With Congress and the Obama Administration both looking to wireless technologies to spur economic growth, tax fairness should be a top priority.

Cell phone taxes: a New York state of mind

Posted: 04/13/09 by Mobile Future Team

If you're a cell phone user - and there are about 280 million of us in the U.S. - you've noticed those annoying taxes at the bottom of your bill.  Those small lines add up to a large hit to your wallet - nearly $21 billion in taxes and fees.

So it's especially dispiriting to read how the Empire State seems to have moved in the wrong direction for its 16+ million cell phone users:

"Eleven federal, state and city levies add as much as 33 percent to the cost of New Yorkers' cellphones, a [New York] Post analysis found.  A typical cell plan costing $49.99 a month comes with a total tax bill of $10.59 -- a 21.18 percent tax rate that helps give New York the fourth-highest cellphone taxes of any state.

"And cheaper plans favored by the frugal and poor are taxed at higher rates."

This is a bad move on so many levels.  Not only are New York's taxes terribly regressive, they also discriminate against what for many is an economic and public security lifeline.  If New York wants to encourage economic opportunity, it should can its discriminatory cell phone taxes.

Congress taking on cell taxes

Posted: 03/25/09 by Jonathan Spalter

Cross-posted from Huffington Post

Representatives Zoe Lofgren (D-CA) and Trent Franks (R-AZ) recently introduced a bill in Congress which could positively impact the millions of consumers of wireless communications in the U.S. and increase the job security of hundreds of thousands of mobile and wireless industry workers. The Cell Tax Fairness Act would prohibit any state or local tax that singles out your wireless service for the next five years.

By addressing the horribly regressive nature of wireless taxes, this bill could promote progress with larger social and economic problems:

• Stopping the growth of regressive taxes could spur greater cell phone use, which, in turn, increases economic opportunity.
• Regressive taxes affect the poor more so than any other group, so this bill directly helps lower-income Americans.
• Given that wireless broadband is the country's fastest growing high-speed option, this bill could help close the digital divide by making the service more affordable to those without other options.

If you've looked at the bottom of your wireless bill recently, you understand what a good idea this is: today, state and local fees average nearly 14 percent of mobile phone bills. That's almost double the cost of ordinary sales taxes.

Even worse, there is a new trend in state legislation to increase taxes on wireless service. In 2007, Missouri cities successfully got courts to impose new "business license taxes" on wireless services at rates as high as 10 percent, even though other business license taxes are typically about one percent. More recently, cities in California have been rewriting utility regulations to expand the list of wireless services that can be taxed.

Senators Ron Wyden (D-OR) and Olympia Snowe (R-ME) introduced a similar bill last year, and hopefully, they will continue their work to limit wireless taxes in the Senate.

Finally, these efforts bring up an important issue for progressives. Mobile services are a great equalizer in America. In this environment of financial stress, when millions of Americans need more - not less - access to the communications and data services provided by their cell phones - government should be doing all it can to encourage investment, innovation, and access. New regressive taxes will only negatively impact these cornerstones of our economic recovery.

Jonathan Spalter, chairman of the Mobile Future Coalition, served as chief information officer at the United States Information Agency during the Clinton administration.

http://www.mobilefuture.org/

The next revolution is social…

Posted: 06/03/08 by Chris Parandian

Howard Rheingold covered the text messaging phenomenon that was occurring abroad in "Smart Mobs" six years ago. It is a fantastic book that takes a close look at many technologies. As I reflect on it, Mr. Rheingold really hit the mark on wireless. Smart Mobs laid the foundation for what is happening now and the explosion of social-mobile technologies.

On that note, in a recent report by eMarketer, they forecast that "mobile social networking will grow from 82 million users in 2007 to over 800 million subs worldwide by 2012." As they noted, this creates significant challenges and opportunities for carriers.

Opportunity

As we know, carriers are counting on data to drive ARPU's higher as voice revenue continues to decline. Data growth will be fueled by users constantly interacting in their social networks. This will have other downstream benefits beyond just accessing the social network.

For instance, let's say I want to let my "followers" on Twitter know I am shooting mobile video. I can enable my qik channel to send a "tweet" to my social network once I began shooting video. Accordingly, any follower on twitter can click a link and watch my live mobile broadcast while I'm streaming over the cellular network (or Wi-Fi hotspot).

Challenge

I see a technical challenge for carriers on the horizon. In order for these applications to thrive, carriers must have the adequate capacity to deliver these bandwidth intensive applications. Accordingly, the FCC and policymakers must make sure that spectrum is available and the regulatory environment is favorable for deploying next generation networks.

Facebook, MySpace and Qik did not exist when Mr. Rheingold wrote his book. However, he was one of the few who studied how "generation txt" was participating and foresaw what the next wireless revolution would look like.