The State Public Service Commission has issued a ruling that likely will add a new fee to cellphone users’ bills in South Carolina by the end of the year.
The PSC ruled earlier this month that wireless providers are in competition with landline telephone companies, a determination that could result in wireless customers paying into the state Universal Service Fund, just as landline customers have done for years.
The fee would make wireless customers pay a percentage of their bill — between 1.1 percent and 1.3 percent — for the service fund and cap the fund at the current amount, $42 million.
Landline phone users have long paid into the fund through a tax on their monthly bills and currently pay 2.65 percent. Cell users already pay a federal tax for the fund. But as fewer people have chosen landlines and more have chosen cell service, revenue in the South Carolina fund has dropped.
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Expanding the number of people who pay into the fund would drop the tax rate for landline customers, who number about 1.1 million in the state compared to more than 4 million wireless users.
The issue was hotly contested inside the Legislature last year and a bill to require cell users to pay into the fund remains in the House Labor, Commerce and Industry Committee.
Last fall, the PSC heard a motion by a landline coalition that asked that the PSC to determine that wireless companies were in competition with the landline companies, a ruling that would then require wireless providers to contribute to the USF.
PSC Commissioner Elliott Elam of Lexington made the motion to agree with the landline companies, saying the record in the case “overwhelmingly” supports their motion.
“I believe that this ruling levels the playing field with regard to the payment by telecommunications carriers into the Universal Service Fund, especially since wireless carriers depend upon wireline facilities in order to function,” he said, according to a copy of the PSC directive posted on the PSC website. “Wireless carriers and their customers benefit from a financially sound wireline industry. Payment into the USF will now be fairly distributed between wireless and wireline carriers.”
The PSC vote was unanimous.
Dukes Scott, executive director of the state Office of Regulatory Staff, which represents consumers in utility matters before the PSC, said he is awaiting the official order from the PSC in the case which would, if it follows the ruling, trigger a new fee on cell users’ bills, possibly by the end of the year.
Landline users have for years been paying into the fund, which helps cover the cost of phone service for hard-to-reach areas and for low-income residents.
Wireless company executives have said the legislation does not hold carriers who use the fund accountable, offers a permanent subsidy for older technology and creates a new tax without providing a new benefit.