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Keep USF Fair coalition targets younger consumers with its message

by Matthew Lasar  Jul 12 2006 - 11:00pm     

The latest stunt is an online calculator that looks like a cell phone. It asks for your monthly cell phone bill, the number of cell phones in your house, your land line bill, and the total number of connected devices that you have: fax, VOiP, online games, etc.

Enter the data and, voila! The calculator estimates how much more you will have to pay if the FCC begins collecting money for the Universal Service Fund (USF) using a flat "by the numbers" tax, rather than by taxing long distance use.

"The proposed flat-fee plan for USF would give large corporate long distance users a big tax break and consumers like you with more than one phone number a whopper of a tax hike!" the calculator page concludes.

The FCCs USF fund puts a small tithe on long distance use to subsidize a variety of services: basic phone connectivity for the poor, rural phone service, and an "E-rate" plan that pays for Internet connections for libraries and public schools.

Even rock ribbed Republicans support the program, including Montana U.S. Senator Conrad Burns.

"For those who say that the Universal Service [Fund] no longer makes sense, or that it should be repealed or scaled back, I encourage them to visit Montana or other rural areas and see the fund in action," Burns told the Senate in early March. "The day has not arrived when technology and the free market can make affordable telecommunications services available everywhere."

But over the last two years the USF has been mired in controversy: corruption, and collection problems. Last year the FCC threatened carriers with almost five million dollars in non-compliance fines. In late June the FCC debarred NEC Computer from any involvement with the E-rate program for six months after the company pleaded guilty to defrauding the service in its dealings with the San Francisco Unified School district.

Big telephone and wireless firms propose shoring up the program by allowing phone service providers to pay into the fund based on their volume of "working telephone numbers" rather than long distance volume. Critics, KeepUSFFair prominent among them, call this proposal a "flat-tax" that will shift the burden for paying for the USF onto poor and working class consumers who use long distance services less often.

Disability rights and civil rights groups strongly back the coalition, among them the NAACP, the Gray Panthers, and the League of United Latin American Citizens (LULAC). KeepUSFFairs Web page masthead graphic displays mostly senior citizens and farmers—those most dependent on the USF plan.

But coalitions strategy of late has been to target younger consumers, including geeks. "Warning to Gadget Heads," a KeepUSFFair action alert email begins: "Whether you have one or 10 cell phones) or high-tech tools our new interactive calculator available at www.phonetaxcalculator.com can help you figure out how much more the proposed flat USF tax will cost you."

The group has also focused on college students and their parents. On May 11th, it issued a report titled "Flunking Numbers," which argued that a flat tax based USF system would hit colleges and universities the hardest, since they provide individual phone numbers to millions of students who live in dormitories. The study, based on data collected by the American Council on Education, estimated the net annual increase in costs to higher education at from $320 to $480 million.

"The reality is that extra USF costs for colleges and universities would be passed along to students and families either in terms of reduced service or higher bills," warned Linda Sherry, co-chair of the Keep USF Fair Coalition.

In the meantime, the FCC has been extending the USF tax to new communications technologies. On June 30th the Commission announced that prepaid calling card services would be classified as telecommunications service providers, therefore required to contribute to the USF. On June 21st the FCC ruled that VOiP calls would also be tithed to assist the fund.


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