California Wanted to Tax Text Messages But The FCC Squashed That Dream

Posted: Dec 17, 2018 7:30 PM

The California Public Utilities Commission (CPUC) was previously considering taxing text messages as part of the Public Purpose Program (PPP), which subsidizes cell phone services for low income families. A similar tax is placed on gas and landlines. Part of the problem though, is more households are switching to having just cell phones, which is putting a strain on the PPP budget. Their goal was to bolster the budget by adding the text message tax. That is, until the Federal Communications Commission (FCC) said text messages are an information service, not a telecommunications service. 

Once the ruling was made, the CPUC made the following statement:

On Dec. 12, 2018, the Federal Communications Commission (FCC) issued a declaratory ruling finding that "text messaging" is an information service, not a telecommunications service, under the Federal Telecommunications Act, which limits state authority of information services. Prior to the FCC ruling, text messages was not a classified service under federal law. Under California law, telecommunications services are subject to the collection of surcharges to support a number of CPUC public programs that subsidize the cost of service for rural Californians and for low income, disadvantaged communities, and provides special services for the deaf, the hard of hearing, and the disabled.

In light of the FCC's action, assigned Commissioner Carla J. Peterman has withdrawn from the CPUC's Jan. 10, 2019 Voting Meeting agenda the draft decision in Docket R.17-06-023, which proposed to clarify that text messaging service should be subject to the statutory surcharge requirement. 

The CPUC was hoping the tax would generate $44.5 million in a one-year time span, Fortune reported.