The Facts

Landline telephone customers paid an average of $11.12 per month, or 22.30% of an average monthly telephone bill.

Wireless telephone customers pay an average effective tax rate of 19.25%.

Cable video customers paid an average of $5.90 per subscriber per month, or 14.33% of an average monthly bill of $41.17.

Consumers who subscribe to cable television and wireline and wireless voice services pay an annual tax bill of $318.

Upon deregulation, interstate long distance rates fell 68% from 1984 to 2003, while intrastate rates fell 56%. The slower decline of intrastate rates is due largely to state regulators who have kept intrastate access charges artificially high in order to maintain subsidies of local phone rates.

The dual system in Texas of deregulated urban markets and regulated rural markets could create a “digital divide” between urban and rural customers. 



Eliminate the “tax on a tax” aspect of the state and local sales taxes. Taxpayer Savings: $90 million per year.

Municipal Franchise Fees. Restructure these fees to reflect the marginal costs of providing services through the right-of-way. Taxpayer Savings: More than $250 million per year.

Private Network Service. Eliminate mandated provision of Private Network Service, which is subsidized through the USF. Taxpayer Savings: $2 million per year.

Universal Service. Do not expand Universal Service Fund subsidies or fees to new services or technologies, e.g., broadband, VoIP. Examine ways to further reduce the Universal Service Fund.