ICYMI – The California Public Utilities Commission is in discussions to tack on a tax or “fee” to the bills of California cellphone users that would help subsidize phone service for low-income Californians as well as libraries and health care facilities.

This new charge would most likely not charge on a per text message rate but on a flat rate added to one’s monthly bill. The kicker? The CPUC has proposed taxing the users retroactively for 5 years back!

This retroactive charge means big bucks for the struggling utility. Charging Californians back 5 years creates new revenue to the tune of $220 million for the state.

So what? I live in Colorado…

The issue in question is if texting is actually a part of the phone service that the telecom industry provides or if it is a communication service, like email. (BTW – Text services do use the cellular technology that phone service uses.) Answering that question will decide the fate of this new fee.

If you live outside of California, it might not affect you now but could very well become a standard charge across the country as users make less phone calls and send more texts and legacy phone utilities need to makeup that gap in revenue.

Time will tell us what the market decides, but here’s a prediction:

From a consumer’s standpoint, the services such as WhatsApp, Skype and Facebook Messenger will become the communication method of choice because those services don’t fall into the utilities’ bailiwick.

People will drop the texting services on their phones if they believe the tax is too much and thus, that revenue for the low-income individuals will dry up anyway.

Creating taxes on specific behavior almost always results in unintended consequences and, many times, creates the exact opposite effect of what it’s trying to accomplish.

In this case, it will likely drive people to do other things and in this case, may not pay for the services that California is trying to provide more of through these fees.


Would this change your behavior?

Do you think government involvement can change our behavior – for good or bad?

Check out our web page that discusses the effect regulations can have on our behavior, and see if this supports how you feel about all of this.

If you’re not excited about a text tax, IFYP.

LMK on Facebook what all this means to you!

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