America's independent, non-partisan advocate for overburdened taxpayers.


An Open Letter to the Senate Commerce Committee: Government Should be Lightening, Not Adding to, the Load Carried by Wireless Customers

October 16, 2007

Dear Chairman Inouye, Ranking Member McCain, and Members of the Committee:

In advance of your "Consumer Wireless Issues" hearing Wednesday, October 17, I write to share some thoughts on behalf of the National Taxpayers Union's 362,000 members regarding the health of the wireless market in America and the truly remarkable benefits it provides.

Wireless communications represent the epitome of a successful business sector in America, for customers as well as employees in the industry. The market has grown from 33.8 million subscribers in 1995 to an astounding 245 million today. Prices are the lowest in the world -- second only to Hong Kong -- and are significantly lower than those in Europe.

Best of all, there are more providers in the U.S. than any other nation in the world, according to statistics from the Organization for Economic Cooperation and Development. Moreover, the market share held by the top three providers here is the lowest in the world. Compare that against developed countries like Canada, Ireland, Korea, and France -- where that number is 100 percent. In sum, Americans have more choices than anywhere else on the globe, and that means better prices and better services.

If anything, governments at all levels should be working toward less, not more, regulatory and tax burdens on this amazing technology. By some estimates, consumers pay 14.5 percent of their bills in taxes and fees -- nearly three times higher than on a typical retail purchase of goods or services, and higher than the effective federal income tax rate that many working- and middle-class families pay. These kinds of taxes only stifle innovation and usage.

The National Taxpayers Union has consistently advocated for open markets that enable providers to compete for consumers' hard-earned dollars. Only in this environment can customers receive the best value for their money. One way to foster this climate would be for Congress to enact Senator McCain's legislation, S. 166, which would declare a three-year moratorium on new or discriminatory state or local taxes on wireless services.

The wireless success story has taken place despite an often-uncertain policy approach. Our members hope the Committee will take tomorrow's opportunity to demonstrate to the nation that government will be working toward less interference in this vital sector.


Pete Sepp

Vice President for Communications