Subject: [NEXTEL-1] Wireless Phone Study: Consumers Pay 18 Percent Extra

From: [email-masked]
Date: Thu, 16 Oct 2003 02:05:56 -0400

Wireless Phone Study: Consumers Pay 18 Percent Extra; Report
Says Government Mandates Hit Minorities, Rural Areas Hardest
Source: U.S. Newswire
Publication date: 2003-10-15

WASHINGTON, Oct. 15 /U.S. Newswire/ -- A new study concludes that U.S. wireless
telephone users could pay over $16 billion a year -- almost $10 per month per user
-- in order to pay for taxes and regulations. The resulting 18-percent national
increase would hit minorities and rural customers disproportionately hard. Nation-
wide, the study concludes, the higher prices could result in 30.94 million fewer
wireless users.

In their report released today, "Taxes and Regulation: The Effects of Mandates on
Wireless Phone Users," economists Thomas M. Lenard and Brent D. Mast of The
Progress & Freedom Foundation list the major regulations and taxes affecting
wireless consumers. They also examine national and state-level mandates already in
place, as well as major new proposals, estimating their effects on the wireless
market.

Their report -- the first national study of its type -- says the typical wireless
user faces 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.
The authors contend that, minus this expense, 22.4 million more people could
afford wireless services.

Two proposals that would add even more to consumers bottom-line wireless burdens:
a proposal by California regulators that would cost subscribers an additional
$3.86 per month, and a national proposal by a New York senator that would increase
consumers' bills in all 50 states.

"In such a competitive environment the costs associated with these mandates will
be passed on to consumers," Lenard and Mast conclude.  "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 says some of the
mandates "may be justified," the authors contend there has been little or no
systematic analysis of the combined effects on average consumers.

The study is available at http://www.pff.org/publications/
pop10.18wirelessmandates.pdf

Among the federal regulatory mandates assessed: Wireless Local Number Portability,
Number Pooling, Communications Assistance for Law Enforcement Act, E911. The study
projects the cost of these four programs to be $2.62 per consumer per month, and
says the additional expense could price almost 8 million potential wireless users
out of the market.

The Progress & Freedom Foundation is a market-oriented think tank that studies the
impact of the digital revolution and its implications for public policy. The
Foundation is a 501(c)(3) nonprofit organization founded in 1993.
http://www.usnewswire.com

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=42641943&ID=cnniw&scategory=Telecommunications%3AWireless&

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