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Shifting the burden on phone fees

Published: August 14, 2013

Watch out, Oklahomans! Taxes are about to go up for most of you.

Years ago, the Oklahoma High Cost Fund was created to ensure phone companies would have enough money to provide service in areas that are expensive to serve. Because phone services were deemed essential, the Oklahoma Corporation Commission imposed a tax on nearly every customer's bill and put the money collected into the Oklahoma High Cost Fund. The funds were then distributed to certain landline phone companies to provide service. And this process continues today.

Problem is, the world has changed and the commission hasn't. Regulations and subsidies only make sense where healthy competition and consumer options don't exist. Clearly this isn't the case in today's modern communications market. Given the intense and ongoing competition, the commission should shut down Oklahoma's High Cost Fund. Instead, commissioners are considering a landline telephone company proposal designed to transfer the High Cost Fund into yet another existing slush fund — the Oklahoma Universal Service Fund. The phone companies' proposal will shift the burden of these funds to more consumers. In the end, most any Oklahoman using communications services can expect a tax increase, whether or not you benefit from either of these funds.

Whether consumers will have to pay more taxes to support this unnecessary fund rests with the commission. I encourage its members to reject the phone company proposal and go back to the drawing board.

Steve Forbes, New York, N.Y.

Forbes is chairman and editor-in-chief of Forbes Media.


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