CALIFORNIA
FOCUS
FOR RELEASE: FRIDAY, FEBRUARY 15, 2013, OR THEREAFTER
FOR RELEASE: FRIDAY, FEBRUARY 15, 2013, OR THEREAFTER
BY THOMAS D. ELIAS
“ANOTHER BILLIONAIRE TRIES TO AVOID A PAYMENT”
The old saw tells us that billionaires
didn’t get rich by giving away money. But what about paying their fair share?
In California today, we see at least
two of the well-publicized super-rich trying hard not to pay sums that amount
to pittances for them. One is Charles Munger Jr., attempting to get legal fees
paid by his opponents in a lawsuit he entered voluntarily. Munger, who got most
of his money the old-fashioned way – his daddy gave it to him – didn’t cotton
to anyone trying to overturn the “top-two” primary initiative largely funded by
him three years ago.
And now comes the reputed richest man
in the world, Mexican tycoon Carlos Slim, who made most of his reported $69
billion to $74 billion fortune via a near-monopoly on telephone service in
Mexico. Consumer groups there claim repeatedly that Slim’s land-line and mobile
phone companies charge exorbitant rates for substandard service, constantly
upping his net worth.
Slim has plenty of interests in this
country, too. One is a large minority stake in the New York Times Co. Another
is an offshoot of his Mexican mainstay, cellphone service.
Quick now, name the company serving
and selling the largest number of pre-paid cell phones in America. It’s not
AT&T or Verizon or Sprint Nextel or the German-owned T-Mobile. It’s
TracFone Wireless, with 22 million pay-as-you-go customers nationwide and about
4 million in California – fully 42 percent of the pre-paid mobile phone market.
Slim owns TracFone, based in Miami, which recently took over Irvine-based
Simple Mobile, another prepaid cell provider.
Slim’s U.S. company sells telephones
and service mostly to lower-income persons whose credit doesn’t qualify them
for monthly service plans that are the mainstay of the better-known companies.
Customers typically pay about $20 for a phone and 60 minutes of service.
State officials maintain that like the
full-service companies, TracFone must pay California’s “universal services
fee,” a charge that funds telephone and Internet service for the poor, deaf and
disabled, plus residents of the lowest-income rural areas.
Estimates from the state Public
Utilities Commission and consumer advocates are that Slim’s company owes
somewhere between $13 million and $20 million worth of fees it did not collect
from customers but should have in recent years.
The PUC has not yet set a definite
amount and TracFone is now in the state Court of Appeals disputing the
commission’s finding that it must collect the fee when it sells prepaid phones,
even though current law says the fee must be “transparent” and appear on
customers’ monthly bills. It has paid the fees under protest since last
February.
Some may infer from this that Slim is
opposed to the kind of “lifeline” services subsidized by the universal services
fee. Not so. TracFone collects similar fees in 28 states and has taken nearly $38
million from other states to provide those kinds of services. “We want a new
law in California that lets us collect transparently at the point of sale,”
says TracFone general counsel Richard Salzman.
But the company does not want to pay
anything for fees it did not collect before last February.
“TracFone has failed to pay its share for programs that make
telephone service more affordable for California’s working families and hearing
impaired,” Juan Jose Gutierrez, leader of the consumer group Two Countries One
Voice, said in a press release. Added Richard Holber, head of the Consumer
Federation of California, “We have to make sure that as the market grows,
companies like TracFone are not allowed to play by their own rules.”
Responds Salzman,
“Our phones are specifically exempt under the law as it now stands. One reason
is that the fee is charged only on in-state calls, not calls to other states
and we have no way to know how the minutes we sell in advance will be used.”
All of which means that no matter how
much the utility commission and the courts eventually decide Slim’s company
owes, the likelihood is he will resist paying.
This makes it high time for the state
Legislature to step in by passing a new law forcing all prepaid cellphone
sellers to assess the fee. That would put TracFone and all such companies on
notice they must collect the same fees as ordinary cellphone companies or get
out of California. Any such law plainly also ought to require those companies
to pay any past fees they’ve refused to collect and remit.
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Email Thomas Elias at tdelias@aol.com. His book, "The
Burzynski Breakthrough: The Most Promising Cancer Treatment and the
Government’s Campaign to Squelch It," is now available in a soft cover
fourth edition. For more Elias columns, visit www.californiafocus.net