Legislative forecasters say that would be a one-time infusion for Oregon broadband, rather than ongoing funding. And unless Republican senators return from their walkout the legislation will die when the current session ends next week.
The House voted 37-22 in favor of the new cellphone fee Monday on a strictly party-line vote, with Democrats in favor of House Bill 2184. A companion bill to create a state broadband office, House Bill 2173, passed 54-5.
The focus of the legislation changed during the session. Instead of emphasizing rural broadband, as originally proposed, the new cellphone fee would now be structured to reduce the burden landline phone subscribers pay to support phone service in rural parts of the state.
The bill would cut the rate landline phone providers pay into a universal service fund from 8.5% to 6%, saving them about 50 cents a month on a typical $20 phone bill, or $6 a year.
Initial estimates were the new fee would cost cellphone subscribers between $4 and $12 a year. At the lower rate now proposed, state forecasters estimate the fee would cost about $4 on average for each wireless line.
Oregon has the nation’s lowest cellphone taxes according to the Tax Foundation, which says the state’s cellular taxes are just one-sixth of the national average.
Rep. Pam Marsh, D-Ashland, led the effort to adopt the cellphone fee in hopes of expanding broadband availability in remote parts of the state encumbered by slow Internet service. She acknowledged the current bill will provide only modest progress toward that goal.
But Marsh said it’s only fair to include cellphones – and Internet calling, also covered by the legislation – among the services subject to the universal service fund.
“If we continue to depend solely on landline users to support the universal service fund, it will certainly shrink away,” Marsh wrote in an email. “It seems like a much better idea to have all providers in the fund, and see how future use and revenue patterns are sustained.”
As cellphone use has risen sharply over the past two decades the use of landline phones has declined sharply. But state revenue forecasters say the portion of a bill where fees can be assessed is shrinking.
So while the legislation would provide $5 million for a broadband office in its first two years, forecasters expect it would generate no money for rural broadband in subsequent years – and the amount it brings in for the universal service fund would actually decline after 2023.
Before Monday’s vote, though, Marsh said she would welcome the initial infusion to get rural broadband efforts started.
“I’d still be tickled pink to get $5 million to put into an office (for broadband planning) and projects,” she said. She said that money could be used to hook up schools that don’t have fast Internet service or to qualify for federal matching funds.
With Oregon’s Republican senators absent from Salem again Monday, in protest of the Democratic supermajority’s effort to pass a bill to regulate carbon emissions, the Senate continues to lack a quorum to conduct business. That could leave the cellphone tax among hundreds of bills that die at the June 30 constitutional deadline for the legislature to adjourn.
Update: This article originally said the cellphone fee could be between $3 and $8.50 per year. Legislative forecasters estimate it would be $4 a year. The article has been updated to reflect that.
©2019 The Oregonian (Portland, Ore.). Distributed by Tribune Content Agency, LLC.
