Maine Looks to Increase Phone Taxes on Families by $200; Good for FairPoint — Bad for Consumers.

We’re hearing some troubling news for wireless consumers coming out of the Maine Public Utilities Commission (PUC).

Since November of last year, the PUC has been considering whether to increase telephone fees to support one telephone company in Maine – FairPoint. If approved, every telephone user in Maine could be assessed up to $60 per year. For a family of four, the total could be more than $200 per year! This fee is also expected to increase every year.

The typical Maine resident already pays nearly 13% of their cell phone bill in state and federal wireless taxes, surcharges and fees. That is more than double what Mainers pay in general sales tax.

The outrageous FairPoint subsidy, which would obviously increase the tax and fee burden for Maine residents, is being proposed as part of the state’s Universal Service Fund (USF). Historically, Maine’s USF has been used to subsidize small landline phone companies to provide traditional local phone service to customers in sparsely populated areas of the state. FairPoint, which is not considered a rural carrier, has never received such support.

Today, more and more consumers are switching from FairPoint to competitors’ services. So, FairPoint is asking Mainers for $67 Million in new subsidies, a 1000% increase in the fee! Good for FairPoint—Bad for Consumers.

Even ex-customers who left FairPoint would still have to pay FairPoint. This burdensome increase would not just hit consumers on their cell phone bills, but on every type of phone service – business or residential. Millions of dollars from this fund will be used to subsidize FairPoint not just in rural areas, but in the majority of places throughout Maine where consumers have other options besides FairPoint – including Augusta, Portland, and Bangor. Good for FairPoint—Bad for Consumers.

A bill in the state legislature, LD 1479, can help prevent this unfair fee increase from taking place. We’ll tell you more about that in a moment, but first, let’s look at where things stand. Mainers currently pay about $8 million per year into the Maine USF fund for small companies.

• FairPoint, which has never received USF support, filed at the Maine PUC to increase the Maine USF fee to $75 million, starting this year.
• That is nearly $5 per month for on every phone in Maine.
• These proposed increases come at a time when fees consumers are paying into the federal USF fund are near record highs.
• A bill pending in Augusta – LD 1479 – would give the Maine Legislature an opportunity to check the reasonableness of any increase in the Maine USF, before it hits your wallet.

What can the people of Maine do about it?

Write your elected officials and ask them to act NOW to halt any increase in the Maine USF! Ask them to support LD 1479 and limit this tax hike!

Take action now!