Keepng Telephone Costs Down
I use an Internet phone. Long distance calls are free, international calls are very low cost. Our business phone with Qwest was about 63 dollars a month. Our Internet phone (which is actually better quality) is only about $42 a month. If it were only a home phone, it would be about $15 a month. My cell phone is cheaper than my business phone - it’s only $30 a month.
The reason for the difference? The phone companies add a LOT of taxes and surcharges, which make up almost half the bill. The Internet phone doesn’t have these. We will cut loose from Qwest in less than a month for this reason. Now here are some tidbits:
- The phone companies want to raise the price of surcharges in an effort to bypass the control of the basic rates imposed by the state.
- Randy Leonard, a Portland city commissioner, is pulling a Dianne Linn and trying to impose a tax on Portland cell phones starting July 1, 2005. With the other commissioners, he hasn’t consulted the voters. Does he think the city voters are that dumb?
- There is also a lot of restlessness at the state level for the legislators to impose taxes on both the Internet and cell phones in an effort to help the struggling telcos that are competing with the low-cost Internet and cell phones.
Here’s another interesting fact: The utilities (Qwest, PGE, Northwest Pacific…) collect these taxes, but only a small part of what is collected is paid to the governments. In other words, what is billed to you as a tax is really a subsidy you are paying for the utility. It bypasses the rate control of the PUC. The utilities argue that their return to the investors is guaranteed, and if they didn’t raise the tax they would have to raise the rate. Come on, let’s get real. Change the rate structure to match what is happening. A utility tax should be a utility tax that goes to the government, not a subsidy that bypasses the rate control.
Warning message to these legislators:
- Don’t tax my Internet or cell phone. Let the telcos sink or swim on their own technology.
- Change laws if necessary so the existing taxes go to the government, not the utility.
We are in a Bush economy. Our phones, televisions, and cars come from Asia. America needs to be more competitive, and that won’t happen until legislators at the Federal, State, and City learn a few things about economics. More taxes is not the route.