WASHINGTON-A think tank funded by the wireless industry and other tech sectors today warned in a new study that U.S. cellular subscribers could pay over $16 billion a year-or about $10 per month extra-to pay for taxes and regulations imposed on the wireless industry.
The study’s authors-economists Thomas M. Lenard and Brent D. Mast of The Progress & Freedom Foundation-predicted the 18-percent cost increase would hit minorities and rural customers hardest. Moreover, the study concludes, higher prices could result in 31 million fewer wireless users. There are currently nearly 151 million mobile-phone users in the United States.
The report examined national and state mandates already in place, as well as major new proposals, estimating their effects on the wireless market.
Lenard and Mast said a proposed bill of rights for California telecom consumers would add nearly $4 to monthly mobile-phone bills. The plan is being considered by the California Public Utilities Commission. The study also singled out as onerous legislation sponsored by Sen. Charles Schumer (D-N.Y.) to enact a national wireless user bill of rights.
The mobile-phone industry recently adopted a voluntary code of conduct to address the rising tide of consumer complaints otherwise being hashed out by states, Congress and the courts.
“In such a competitive environment, the costs associated with these mandates will be passed on to consumers,” stated Lenard and Mast “The wireless sector is under increasing pressure on a number of regulatory fronts-most notably in the areas of taxation and regulatory mandates.”
While the study said some mandates may be justified, the authors argue there has been little or no systematic analysis of the combined effects on average consumers.
The PPF study comes as industry approaches the Nov. 24 deadline for implementing wireless number portability and as California regulators near a vote on the telecom user bill of rights.
Among the entities PPF lists as contributors are the Cellular Telecommunications & Internet Association, the Consumer Electronics Association, Motorola Inc. (the No. 1 U.S. mobile-phone manufacturer), SBC Communications Inc. and BellSouth Corp (60-percent and 40-percent respective owners of Cingular Wireless L.L.C.), Sprint Corp. (parent of Sprint PCS) and Microsoft Corp. (a new Web mobile partner of Vodafone Group plc, the world’s largest mobile-phone operator.)
