January 31, 2007
Sprint says "Switch"

Switch away from Sprint, that is.

State Comptroller Susan Combs on Monday asked Sprint to quit charging customers a fee reflecting Texas' expanded business tax, but a spokesman for the wireless phone company said the surcharge will stay.

Sprint in January began charging a surcharge totaling 1 percent of each customer's wireless rate plan called the "Texas Margin Fee Reimbursement."

The fee is meant to cover part of the money that Sprint will owe next year under the business tax expansion, said John Taylor, senior manager of public affairs for Sprint Nextel Corp.

"There is nothing in Texas or federal law that precludes us from making this business decision, which we fully disclosed to our customers and to the public," Taylor said.


Perry spokesman Robert Black called the company's surcharge "a political stunt trying to poke their finger in the eye of the Legislature. ... Why don't they put other charges on their bill? Why don't they ask their ratepayers to pay their utility bill or their CEO's bar bill?"

Not to put too fine a point on it, Robert, but they already do pass those charges on to their customers. They just don't itemize them. But hey, I appreciate the rage-against-the-machine sentiment anyway.

Putting aside any political points that may or may not be scored by this little stunt, it seems to me that unless Sprint backs off (or is forced to back off) from this, it opens a competitive opportunity for its competitors. The ad copy practically writes itself. Will Verizon, Cingular, T-Mobile et al follow Sprint's lead, or will they distinguish themselves as the provider with lower fees? We'll see.

Posted by Charles Kuffner on January 31, 2007 to Budget ballyhoo

I haven't been following this story very much, but isn't one of the issues the fact that Sprint is taxing on 100% of their gross receipts when there is a 70% cap on the tax from the state? Essentially they are using it to turn a greater profit.

Nonetheless, it is obviously a chance for the new Comptroller to grandstand and score some free media as being the people's watchdog.

Also, how great is it having Perry's spokesman attack corporate CEOs for their largesse?

Posted by: Joe on January 31, 2007 8:52 AM

This won't, I think, be an opportunity for Sprint's competitors. They might not be doing this particular add-on, but they all charge a boatload of fees and taxes that pump your bill up 20-30%. Sadly, there's no transparent pricing in telecom. Not surprising for a market controlled by an oligopoly.

Posted by: John on January 31, 2007 10:31 AM