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California reverses course on plan to tax text messages

The proposal was withdrawn after a new FCC ruling limited states' authority over texting.
Close up of friends texting with cell phones at table
JGI/Tom Grill / Getty Images

Californians can continue their carefree texting for the foreseeable future.

The state's public utilities commission announced Friday that it would not tax residents' cell phone plans, reversing course on a proposal to add a new monthly fee on texting in hopes of increasing funding to a program that finances services like 911 and subsidized phone rates for low-income Californians.

According to the California Public Utilities Commission, the tax would have cost customers an additional $1.40 for $20 of texting charges. But the utilities commission said a new Federal Communications Commission rule would not allow them to follow through on the idea.

The changed rule came Wednesday when the FCC said text messaging is an information service and not a telecommunications service. That means states have a limited authority over texting.

The California Public Utilities Commission had scheduled a vote on the measure for Jan. 10, but Commissioner Carla Peterman withdrew the proposal in light of the federal decision.

The FCC did not immediately respond to a request for comment, but the rule change gained the support of consumers, conservatives and members of the telecommunications industry.

The Cellular Telecommunications Industry Association, a trade organization whose membership includes companies like AT&T, T-Mobile USA, Verizon and Comcast, which owns NBCUniversal, previously told NBC News they opposed the plan.

"We hope that the CPUC recognizes that taxing text messages is bad for consumers," said Jamie Hastings, senior vice president of external and state affairs for the association. "Consumers exchanged 1.77 trillion messages in 2017, making text messages one of the most common and effective means of communication for Americans.

"Taxing this service would burden those who rely on and use this service each and every day.”