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The unfair assessment of e911 fees

Joe — Tue, 10 Jan 2012 16:30:48 +0000

As with all things in life, 911 services cost money. While our general tax dollars help fund 911 dispatch services, there’s also a specific tax on your phone bill that funds 911. This has extended to postpaid cell phones, wherein each phone line is charged an e911 fee. This helps fund not only the dispatch, but the technology necessary to locate users. Until recently, prepaid wireless users were exempt from this tax. There was just no easy way to assess it. A few years ago, however, some state legislatures decided to begin charge e911 fees. This comes at the point of sale of prepaid refill cards. It’s pretty easy to see, even with scant description, why this is unfair.

The need for e911 tax

As with all government services, e911 requires taxpayer money. It’s a common service implemented for the common good. It wouldn’t quite be in the spirit of emergency services if the EMTs required up-front payment before taking you to the hospital. At the same time, tax dollars are not easy to come by. Our country spends more than it earns, so our government becomes stingy with public fund dollars. That can leave many 911 services hurting for dollars.

If we want to continue providing 911 services, we need everyone to pay into the fund. If prepaid wireless users, a large and growing segment of the population, are exempt from such fees, then we have some people receiving the service and not paying for it. Considering the state of e911 funding, we would do well to find any way possible to provide funding. Since prepaid users don’t pay into the fund, they’re a logical place to start.

(The problem, really, extends to all cell phone users, since the e911 fee for cell phones isn’t quite as high as the 911 fee on landlines.)

Assessing prepaid users

The problem with prepaid users paying into an e911 fund is a matter of logistics. How can we best charge these users for this vital service? State legislators around the country have started with POS charges. Every time a user buys a refill card for their prepaid service, they’re assessed a fee of 50 cents (the common rate). This applies to users who pay for their $50 unlimited plan with a card, and those who add a $10 top-up.

Already we see the regressiveness of the tax. Someone who prepays for a $50 unlimited plan is likely better off than someone who adds a $10 card every week. That $10 weekly top-up can be a necessity; not everyone has the means to pay a lump sum up front every month. Yet by month’s end the $50 user will have paid a total of $50.50, while the $10 top-up user will have paid $42. This is the type of thing we should seek to avoid. But it’s not even close to the biggest problem.

Online purchases

As of now, online refills are not subject to the e911 tax. Again, typically better-to-do users are more likely to pay for their services online, since they’re more likely to have internet access at home. As we’ve seen in the case of Amazon.com and sales tax, it’s difficult to assess taxes to purchases made online. If we can’t get proper sales tax, then imagine what it’s like for e911 taxes.

While I wasn’t able to find any hard numbers as to the percentage of prepaid users who pay online, I have to assume that it’s a good number. Maybe not the majority, but certainly a solid percentage. All those people skip by the e911 tax completely, while those who buy cards at retailers pay it every time. While charging the fee at the POS does help, it still leaves plenty of dollars on the table. It also allows better-to-do users to skirt the fee.

(That’s not to say that lesser-to-do folks should be exempt from the tax. It’s to say that if anyone were exempt, it should be the ones less able to pay rather than the ones who have the money up front to pay for a month’s worth of service.)

Finding a fair way

As we saw in the above-linked article, e911 services are generally underfunded. Yet they cost plenty to operate. They need not only dispatchers, but also SCADA systems to locate callers. These are big expenses that 911 services can burn through quickly. Yet from all angles they’re not getting enough user funding. Cell phone users get charged a lesser fee than their landline counterparts. Prepaid cell phone users can skirt the fee completely. We need a better way to get those funds, so that 911 services can operate for all of us.

The measures passed by various state legislatures show that it’s no simple task. They have power to assess fees at the point of sale, but it’s much tougher for them to enforce a fee from online purchases. Additionally, there’s a strong lobby in Washington that opposes any new taxes for cell phone users. Even a hike in the e911 rate to match landline rates would meet opposition. There might be good intentions, but they’re not leading to fair implementation.

Far be it from me to suggest a viable alternative. I’m not the one in congress, whether state or federal, who knows what’s feasible and what is not. But it’s pretty clear that the current system is harmfully faulty. We need big changes in order to properly fund e911 services. The question is when will someone stand up and convince us that it’s necessary?

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Republic Wireless opens its doors for business

Joe — Tue, 08 Nov 2011 16:27:04 +0000

The day has finally arrived. Last week we heard about Republic Wireless, a service that advertised a deal that seemed too good to be true. For $19 per month they advertised unlimited voice, text, and data. They are technically an MVNO of the Sprint network, but their business model centers more on WiFi connections than on cellular signal. That is, when you’re connected to WiFi all of activity gets routed through that signal rather than the cell network. It’s an interesting proposition for sure, but we’ve seen deals like this in the past. Can Republic hold up as a viable service? Here are the details.

Again, it’s $19 per month for those unlimited services, but if you’re not frequently within WiFi range you’re going to run into some issues. While the service is labeled unlimited, there are definitely limits on your cellular network usage. Specifically, the website says 550 minutes, 150 text, and 300MB of data per month. When you exceed those numbers Republic will contact you and let you know you need to scale down your usage, or else they’ll boot you from the network — though they swear they’ll do so politely.

As expected, the service works only with a specific Android phone. Turns out it’s the LG Optimus, though it’s specially designed to handle those basic tasks over WiFi when available. Because you need this phone Republic has bundled it with the first month of service. That is, the first month will cost you $199, while each subsequent month will cost $19 per month plus tax.

Republic says it right up front: this service is not for everyone. If you’re not frequently around an open or otherwise accessible WiFi network, chances are you’re not going to be a fit for them. If you know this up front it’s probably best to avoid Republic, because you’ll never get back that $199 start-up fee — and you’ll be stuck with a phone customized to their service. But if you think you can hack it, and you think that $19 per month is just a swell price, you can find out more at RepublicWireless.com. It’s hard to deny the potential this service has.

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Republic Wireless to offer $19 monthly unlimited service

Joe — Wed, 02 Nov 2011 14:42:34 +0000

Republic Wireless, a new MVNO operating on the Sprint network, plans to make a splash when it launches next week. Like many other MVNOs, they’ll offer monthly unlimited talk, text, and data services. Their edge: a price that no one currently approaches. They’ll charge just $19 for the service, effectively cutting in half the current best plans on the market. We’ve seen this before, of course, so it’s natural to question whether Republic Wireless will take the market by storm or it will bust.

The last time we heard about an MVNO undercutting the market was Zer01. When they announced their service, unlimited everything for $70, it was a cutting edge offer. Of course, that was two and a half years ago; today a $70 unlimited plan is on the high end of the prepaid market. But at the time it seemed revolutionary. Laptop Magazine even gave it best in show at CTIA 2009. Of course, Zer01 ended up going bust before launching.

How is Republic Wireless going to offer service so much cheaper than other carriers and MVNOs? They’re going to use WiFi networks whenever possible. This will require a special Android handset, the price of which is of yet undisclosed. Normally unsubsidized Android handsets will cost at least $100, and the idea of a special handset makes it seem like it will cost even more. But given the budget nature of the plan, it’s possible that Republic does provide some subsidy, hoping that customers stick around for long enough to justify the cost.

(On the other hand, it’s unlikely that they’re making enough profit off each month’s service that they could even afford to subsidize handsets. It’s very possible that this service will require a relatively high up-front cost.)

Even with the cheap monthly price, Republic will impose no bandwidth limits. This is possible largely because of the WiFi hand-off, but it’s still a significant offering. Customers will still use Sprint’s 3G data network when no WiFi is available, and there are certainly areas where WiFi won’t be available for miles. It’s unclear what happens if a customer uses an excessive amount of 3G data.

Republic plans to launch the service on November 8th, so we’ll soon find out how reliable they will be. If this works out, they could see a boom in business heading into the holiday season.

Via GigaOm.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Cox will offer prepaid services

Joe — Fri, 01 Jul 2011 15:00:37 +0000

The 700MHz spectrum auction, which we covered heavily at the time, didn’t figure to produce many new carriers. The big guns, as expected, grabbed the bulk of the airwaves, leaving very little for newcomers. One of them was Cox, the cable provider. it appears, though, that it’s using its MVNO agreement with Sprint more than its own network. As FierceWireless’s Mike Dano reports, Cox plans a prepaid offering in the future. It’s not known how widely they’ll roll out and market the service — in fact, little is known at all. But it’s coming, and from the sound of the quotes it won’t be too far off.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Georgia adds 75-cent 911 fee for prepaid card purchases

Joe — Tue, 28 Jun 2011 12:30:52 +0000

We’ve seen many states adopt laws that charge prepaid users fees for 911 services. It seems fair enough. Prepaid customers use 911 services just like postpaid users, and postpaid users have a 911 fee added to each month’s bill. The problem comes when trying to assess who pays and who does not. Ideally everyone would, but states simply do not have that type of jurisdiction. As with many other states that have implemented 911 fees for prepaid users, Georgia will add a fee at the point of sale, amounting to 75 cents per card purchased. Unfortunately, that doesn’t address the entire issue.

The first, and most prominent, issue here is the internet. The state of Georgia — and all states — cannot charge the 911 fee for purchases made on the internet. So Georgia residents wishing to avoid the 75 cent 911 fee can do so by buying their prepaid minutes on a website, rather than at the store.

The other issue is that the 75-fee is flat, regardless of card denomination. It makes much more sense, then, to buy in larger increments, since it amounts to a lower percentage of the overall purchase. That is, you’re better off buying one $50 card than a $25 card at one point and then another $25 card later. Of course, buying minutes in larger packages increases the chances that they’ll expire, so there’s another drawback.

There doesn’t appear to be any easy way for states to collect 911 fees from prepaid users in the same way they collect from postpaid users. Every state is subject to the above limitations. It could take reform at the federal level in order to collect this fee for online purchases. Understandably, that could take a lot of time and consideration.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Monthly plans the new trend in prepaid

Joe — Tue, 05 Apr 2011 16:14:56 +0000

When we started this site, and even when we started the blog, pay-as-you-go was the primary focus in prepaid. Monthly plans were the domain of the postpaid carriers, and while many prepaid services offered monthly plans, it always seemed as though pay-as-you-go was more popular. That, apparently, has changed. Phil Goldstein of FierceWireless reports on a J.D. Power and Associates study which shows that 49 percent of prepaid users are now using monthly plans, up from 30 percent in 2008. Why the change?

There has certainly been an emphasis on unlimited plans since then, which I’m sure played a big part in the shift. While MetroPCS and Cricket have been around for a while, and have offered monthly plans the entire time, other carriers have stepped up lately. Straight Talk entered the scene in 2009. Two of Sprint’s prepaid brands, Boost Mobile and Virgin Mobile, have put a greater emphasis on monthly plans. Then there are new MVNOS, such as PlatinumTel and Simple Mobile, which have offered mainly rate plans, rather than pay-as-you-go rates.

This is good for carriers, of course, as it means more predictable revenues for them. While it’s true that people can still drop the service at any time, they’re still prepaying for a month. With pay-as-you-go, they can drop the service whenever their minutes run out. At the same time, this is beneficial to consumers, in that they can get monthly services on the cheap. I expect that in another year we’ll see another uptick in monthly prepaid plans vs. pay-as-you-go.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Straight Talk for your business?

Joe — Wed, 10 Nov 2010 13:30:22 +0000

There’s an interesting read at TheStreet.com about how prepaid cell phone services sold at Walmart — namely Straight Talk — could be a viable option for small businesses. The author notes that the addition of two smartphones to the Straight Talk lineup put the company on small businesses’ radars. Still, it’s not an ideal solution. As the author says, ” Just don’t ask it to be a legit smartphone with all the attendant apps and fancy features.” How much, then, can handsets such as the Nokia E71 help small businesses? By providing an incremental step up the technological ladder at a reduced price?

I honestly think that with the addition of their customer loyalty program, Boost Mobile presents a better option. The BlackBerry Curve 8530 will cost you a bit more up front, and it will take 18 months before your monthly bill equals the $45 that Straight Talk costs. But for that extra money — $185 over 18 months, including the $5 difference between what the two handsets cost — you get a ton more services. That’s better email, more apps, and, though BlackBerry isn’t exactly known for it, an easier web browsing service.

Prepaid phones are becoming a viable option for small businesses. I’m just not sure that Straight Talk is the service to pick.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Verizon, AT&T add to numbers with resale partners

Joe — Mon, 25 Oct 2010 15:29:41 +0000

Overall the third quarter did not end well for Verizon. The nation’s largest wireless carrier added just under a million customers while its biggest rival, AT&T, added nearly 1.5 million. One big swing comes from carrier-branded prepaid additions. Verizon lost 137,000 prepaid subscribers, while AT&T added 321,000, a swing of 458,000 subscribers. Where Verizon gained was in subscriptions from resale partners. Verizon added 550,000 resale partner subscribers, while AT&T added 406,000.

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

The Big Four/Five Prepaid Showdown

Joe — Tue, 12 Oct 2010 12:30:55 +0000

Things are changing in prepaid, especially for major carriers. For them, prepaid used to be an afterthought. They all offered plans, mainly to capture value at the margins. But now that prepaid wireless services have gained some steam, the big carriers are starting to pay attention. We’ve seen each of the big three — Verizon, AT&T, and T-Mobile — revamp their plans in the past few months. We’ve also seen Sprint make major strides with its two prepaid brands, Boost Mobile and Virgin Mobile, and also add a third, Common Cents. But how do those offers stack up against one another?

Unlimited

Each carrier offers some sort of unlimited plan, which covers voice, text, or both. Some even include data. Here is how each carrier stacks up.

AT&T’s data rate includes only 200MB

Verizon and AT&T offer additional options for their unlimited plans. AT&T prepaid customers can pay $2 per day for unlimited talk and text. This works out to about the same as the monthly rate, except that the $2 daily fee only applies on days the phone is used. Usage includes made and received calls, instant messaging, and sent text messages. Verizon has the same idea, except it charges $3.99 per day and charges 1 cent per text message. So it’s not really an unlimited plan, after all, and it costs twice as much as AT&T’s. Additionally, Virgin Mobile offers unlimited text and data with limited voice plans.

These carriers also offer pay-as-you-go rates, each with a little catch. Common Cents replaces Virgin here, since Sprint clearly favors that brand for its pay-as-you-go arm.

This plan includes unlimited nights and weekends
T-Mobile charges 10 cents to send, 5 cents to receive text messages

Here again we see that Verizon has the highest rates of all. They’re the only remaining carrier that charges a daily access fee for pay-as-you-go rates. Even then, customers don’t get that 10 cents per minute rate unless they pay 99 cents per day. This is in stark contrast to AT&T and Boost Mobile, which charge 10 cents per minute without an access fee, and Common Cents, which charges 7 cents per minute and rounds down the seconds on calls (so a 1:59 call costs 7 cents). Even T-Mobile lags behind, as customers need to purchase $100 in refills in order to get the prime 10 cents per minute rate.

Looking at the available options, it appears as though Boost Mobile offers the best overall rates. The trick there is to go with CDMA, as their iDEN network simply isn’t as good. T-Mobile offers competitive rates, but they fall in just behind. AT&T has become more competitive with a $60 unlimited offer plus 10 cents per minute rates without an access fee. The combination of Virgin Mobile and Common Cents solidifies Sprint’s offerings.

Given this information and your preferences, which carrier do you prefer?

This post originated at PrepaidReviews.com - The number one resource for Tracfone Prepaid information on the web!

Prepaid Reviews Blog » Prepaid Services

The unfair assessment of e911 fees

Republic Wireless opens its doors for business

Republic Wireless to offer $19 monthly unlimited service

Cox will offer prepaid services

Georgia adds 75-cent 911 fee for prepaid card purchases

Monthly plans the new trend in prepaid

Straight Talk for your business?

More consumers ready for prepaid switch

Verizon, AT&T add to numbers with resale partners

The Big Four/Five Prepaid Showdown