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CONTACT: David Fish
May 13 , 2004
(202) 289-8928
Analyzing Effects of Wireless Mandates
Transcript of Hill Seminar Features Diverse Expert Views

WASHINGTON D.C. - U.S. wireless telephone users pay over $16 billion a year - almost ten dollars per month per user - in order to pay for taxes and regulations. And the higher prices could result in 30 million fewer wireless users. Those were the central findings of a Progress & Freedom Foundation study released last year. In reaction to that study, a panel of experts - including a federal and state regulator, a noted economist and one of the authors of the report - met to examine the effects of mandates on wireless consumers. A transcript was released today.

Panelists including study author Thomas M. Lenard, senior fellow and vice president for research at the Foundation, Hon. Anne C. Boyle, member of the Nebraska Public Service Commission, John Muleta, chief of the Federal Communications Commission's wireless bureau, and Paul H. Rubin, Samuel Candler Dobbs Professor of Economics and Law at Emory University. In his report "Taxes and Regulation: The Effects of Mandates on Wireless Phone Users," Lenard said typical wireless users faced a total tax rate (federal, state and local) of over 14-percent on wireless services. This amounts to $6.77 for the average monthly bill of $54.14. He told panelists the goal of his study was to quantify costs of mandates.

Muleta said emergency 911 service, CALEA and local number portability were needed, and should be implemented because they are "public goods". But, in a competitive marketplace, customer service requirements are "not necessarily a public good.let the carriers figure out how to deal with customer service issues without us sort of arbitrarily setting a floor or a ceiling." Commissioner Boyle said her job is to help consumers with their complaints about service quality. "That's where John [Muleta] and I would probably disagree," she said. ".The further away customers get from the body that can help them, the more intimidating the process is.when I get a complaint in Nebraska, even though we are not authorized to handle them, our agency does take those complaints."

Rubin disagreed with Boyle, pointing to California's wireless bill of rights proposal that "actually ends up reducing rights of consumers rather than increasing them, because you're forcing consumers to pay $3.86 a month" for something they may not want. "Regulation is justified in the case of perhaps monopoly or limited entry, as was true for landline telephony for many years, but is not true for wireless."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation