About That Universal Service “Tax”

            Universal service opponents like to claim in real courts, and the court of public opinion, that the surcharge imposed by carriers represents an unlawful tax.

             Consumers’ Research, the advocacy group seeking to have universal service funding deemed unconstitutional, wants several courts to endorse its view that the “revenues raised for the Universal Service Fund pursuant to 47 U.S.C. § 254 are taxes and therefore Congress’s standardless delegation to the FCC of authority to raise and spend nearly unlimited taxes violates Article I, section 8 of the U.S. Constitution.” https://storage.courtlistener.com/recap/gov.uscourts.ca5.215996/gov.uscourts.ca5.215996.1.1.pdf?ref=broadbandbreakfast.com at p. 4.

             When asked whether universal service funding constitutes a tax, former FCC Commissioner Harold Furchtgott-Roth stated:  “I think the way it’s structured now it’s unambiguously a tax. It’s -- the people who pay in — and the statute’s very clear.” https://fedsoc.org/events/consumers-research-v-fcc-and-the-legality-of-the-universal-service-fund-contribution-regime.

             Several advocacy groups preach the gospel that Congress has no legal authority to create a universal service funding mechanism and in turn the FCC has no basis to establish policies and rules, nor can it delegate administrative responsibilities to the Universal Service Administrative Co.

             If, somehow, they never learned the distinction between a tax and a legislatively mandated charge, that carriers pass through in its entirety to subscribers, consider what a wireless reseller discloses in its terms of service:

             Surcharges

When imposed, unless prohibited by applicable law or agreement, you agree to pay all surcharges (“Surcharges”), which may include, but are not limited to: Federal Universal Service; various regulatory charges; Kroger Wireless administrative charges; gross receipts charges and certain other taxes imposed upon Kroger Wireless; or charges for the costs that we incur and pass along to you. Surcharges are not taxes, and we are not required to assess them by law. They are charges we choose to collect from you, are part of our rates, and are kept by us in whole or in part. The number and type of Surcharges will be provided and may vary depending upon the location of the transaction or the primary account address of the payment method or Device and can change over time. We determine the rate for these charges, and these amounts are subject to change as are the components used to calculate these amounts. https://www.krogerwireless.com/support/terms-and-conditions

             When creating contracts and tariffs, wireless service providers must play it straight.  Elsewhere it’s caveat emptor.