Take USF. Today, wireless contributions total close to 35 percent of the entire fund. But, here’s the rub, wireless carriers draw out about 12 percent. It’s a huge inequity. So you’re going to hear us talk more about creating a new USF that is more limited than the one we know today, but also one that does not pick winners and losers and makes support available to all competitors, regardless of technology.
When you look at ICC, you see some of the same problems. We definitely see a system in need of reform. When you look at it from just an administrative standpoint, it’s very complex and because our carriers have to navigate this kind of bureaucratic maze, it becomes very costly. But unfortunately the problems don’t end there. Like USF, we don’t think the ICC process should choose technology winners and losers; it should be a system that encourages carriers of all types to compete with one another. The only other point I would make on this issue is that we favor the “bill and keep” approach and believe that all carriers, not just from their competitors. These are issues where we are talking to Congress and the FCC simultaneously and we think it’s important to base any changes on what’s truly best for consumers and not any one particular mode of telecommunications.
Wireless Wave: Anything else?
Steve Largent: Yeah, a whole lot. {laughter}
Wireless Wave: Hey, that’s why I’m…
Steve Largent: I really just want to mention innovation one more issue that is something we are always involved in whether it’s in Congress or in the states and that is taxation, excuse me, excessive taxation.
Taxes and fees add 17 percent to the average consumer’s monthly wireless bill. If that’s not ridiculous I don’t know what is. If you go to the store and buy an iPod, you’re going to pay roughly 7-8 percent in sales tax, and that’s it. And you pay that tax once. If you go out and buy a wireless device, which has five times the capability of an iPod, you’re going to pay, on aver-age, 17 percent in tax. And you pay it every month!
To tax wireless in this fashion makes no sense from an economic standpoint, a consumer standpoint, or a technology and innovation standpoint. So we’re very aggressive on this issue and we are not only fighting proposals to hike wireless taxes in states and cities, we are also engaged in campaigns to repeal them. And the most obvious example of that is the 3 percent Federal Excise Tax (FET). No fewer than three separate fed-eral appeals courts have found the FET to be illegal. So, we’re hopeful that all wireless consumers will soon see a 3 percent tax cut.
Wireless Wave: Steve, you’ve been great, thanks for your time.
Steve Largent: Thank you, it’s been fun.
