House Votes to Freeze Cell Phone Taxes

The House voted to freeze cell phone taxes for five years, helping the administration encourage the spread of wireless technology by reducing a cost barrier. "We need to encourage the development and adoption of wireless broadband, not tax it out of existence," said Rep. Zoe Lofgren (D., Calif.), who sponsored the bill with Rep. Trent Franks (R-Ariz.) The lawmaker said customers pay an average of 16.3 percent in handset taxes, with some states like Maryland charging nearly 27 percent. "By freezing wireless taxes and fees, we hope to spur additional consumer driven development in wireless broadband and to increase access to advanced wireless networks," added Lofgren. The CTIA, a wireless industry trade group composed of major carriers, lauded the legislation as long overdue, suggesting their retail stores experience the brunt of customer dissatisfaction over the taxes. Lofgren and other supporters of the bill echo the Obama administration's position that high-speed mobile connections are essential for the nation's progress and should be affordable for everyone. The president's proposed American Jobs Act, for example, would authorize TV broadcasters to conduct wireless spectrum auctions that the administration says will expand the U.S.' mobile network. The Jobs Act follows through on Obama's expressed desire last year to auction off 500 megahertz of federal and private spectrum during the next decade. Lofgren and the White House likely hope lower taxes and increased spectrum will together encourage cell phone adoption throughout the country, which they say would boost the economy and create jobs. Cell phones now outnumber people in the U.S., indicating their growing importance as indispensable tools for communication. In order for this growth to continue, Lofgren and others argue, lower taxes and more spectrum are essential to keep costs down, which they say is a better system than forcing people to pay high taxes for limited service.