CORRECTING and REPLACING Texas Groups: 2 Million of State's ``Most Vulnerable'' Phone...

CORRECTING and REPLACING Texas Groups: 2 Million of State's ``Most Vulnerable'' Phone Consumers Face Unfair, Higher Taxes under Pending CSEC Action

AUSTIN, Texas--(Business Wire)--
Second paragraph, first sentence of release should read: CSEC's
board is scheduled to meet in Austin Friday, June 20, to consider
adopting a new service fee to be charged when consumers purchase a
prepaid cellular phone. (sted CSEC's board is scheduled to meet in
Austin today to consider adopting a new service fee to be charged when
consumers purchase a prepaid cellular phone.)

The corrected release reads:

TEXAS GROUPS: 2 MILLION OF STATE'S ``MOST VULNERABLE'' PHONE
CONSUMERS FACE UNFAIR, HIGHER TAXES UNDER PENDING CSEC ACTION

Two statewide consumer groups hand-delivered a letter today to the
Commission on State Emergency Communications (CSEC) to urge the agency
to kill a proposal to raise phone taxes on two million older, low
income and disabled consumers who rely on affordable, prepaid cellular
phones.

CSEC's board is scheduled to meet in Austin Friday, June 20, to
consider adopting a new service fee to be charged when consumers
purchase a prepaid cellular phone. Prepaid cellular phones are phones
that do not involve a billing arrangement with the customer, unlike
"postpaid" cellular phones sold on a more expensive long-term
agreement basis.

Both the Texas Consumer Association and the Gray Panthers of Texas
have registered their strong concerns about the impact of this tax
increase on low-income Texans.

"In fact, too many Texans already are priced out of having cell
phones ...which could serve as an important link to their ability to
get and keep jobs," said Clint Smith of the Gray Panthers of Texas.

"Clearly, it makes no sense to finance a phone-based public safety
system by literally pricing phone service beyond the means of those
who are expected to pay the tax," noted Sandra Haverlah, president of
Texas Consumer Association.

The full text of the letter delivered by the consumer groups is
shown below.

For further information, contact Kristy Ozmun Public Relations at
512-474-1501.

Paul Mallett

Executive Director

Commission on State Emergency Communications

333 Guadalupe Street

Suite 2-212

Austin, TX 78701-3942

Mr. Mallett:

Today, prepaid wireless cell phones help keep more than two
million Texans connected to their families, friends, employers and
their communities. Prepaid customers in Texas and nationwide tend to
be lower income, older, rural and more often minorities than their
more affluent counterparts who rely on landlines or more expensive
postpaid cell phone plans(1). These Texans turn to prepaid plans
because they don't have the financial resources or the credit that
would be necessary to gain access to landlines and wireless phones.
Affordable prepaid cell phones help keep them on the communications
grid, which is a stated goal of both federal and Texas
telecommunications policy.

For Texas' pre-paid population, cost is a paramount concern. They
are struggling to meet rising costs for gas, food, heating and cooling
and health care. Many have cut out any personal spending in order to
meet their monthly bills. They are the most vulnerable Texas consumers
and simply cannot afford to have another government tax increased at
their expense.

Yet, that is precisely what the Texas CSEC proposes to do by
insisting that prepaid wireless customers or their service providers
pay a monthly fee to fund improvements to the 911 system's
applicability to cell phones. While we don't disagree that 911 may be
a worthy project, we believe that the Texas government can find the
resources to make such improvements without adding to the burden of
those who use prepaid cell phones. Clearly, it makes no sense to
finance a phone-based public safety system by literally pricing phone
service beyond the means of those who are expected to pay the tax.
Further, any short-term advantages of doing so would be illusory if
the tax base would be inherently unstable as a result of shrinking the
pool of those who can afford prepaid phones.

In fact, too many Texans already are priced out of having cell
phones ...which could serve as an important link to their ability to
get and keep jobs. A major April 2008 report by researcher and author
Nicholas P. Sullivan concluded that providing cell phones to the 38
percent of America's 45 million poorest households now without them -
including millions of seniors, Hispanics, African-Americans and rural
residents - could help them get or make money worth $2.9 billion - $11
billion. The overall conclusion is that cell phones are a huge boon to
an individual's potential economic productivity and earning power. In
other words, prepaid phones that are the only telecommunications
connection for many of the two million Texans who now have them are a
critical element of their ability to find work and be productive
members of society. Does the state of Texas think it is sound public
policy to make prepaid phone service too expensive for people to use
... and therefore limit their ability to work and support their
families? It makes no sense to impose a special tax targeting Texas'
most vulnerable consumers if the effect of doing so would be to drive
up their need for public assistance in the absence of being able to
find work.

Any increase in prepaid cell phone taxes to fund 911 that cannot
be collected from consumers directly most likely will simply be passed
directly on to consumers in the form of more expensive phone service.
Experience teaches us that any notion that phone companies will simply
"eat" the tax is wishful thinking.

Whether the proposed 911 tax is felt directly or indirectly by
Texas consumers, the bottom line will be the same: It will price
prepaid telephone service beyond the reach of some significant portion
of the two million prepaid phone customers in the state. This makes it
an unfair and unreasonable tax and one that would actually turn Texas
telecommunications policy on its head when it comes to the state's
poorest and most vulnerable consumers. Certainly there must be fairer,
less anti-consumer ways to fund the improvements to the 911 service
that you seek.

Sincerely,

Sandra Haverlah

President

Texas Consumer Association

Clint Smith and Kathy Tyler

Co-Conveners

Gray Panthers (Texas)

(1) See Nicholas P. Sullivan, Cell Phones Provide Significant
Economic Gains for Low-Income American Households, New Millennium
Research Council, April 2008.

for Texas Consumer Association
Kristy Ozmun, 512-474-1501
Kristy@ozmun.com

Copyright Business Wire 2008