….but Government Fees Undermine the Gains
By Karen Kerrigan –
At a time when inflation continues to squeeze businesses and consumers alike, there is good news on one item that is vital to small business operations: wireless service.
A new Cellular Telecommunications and Internet Association (CTIA) study finds that wireless prices are declining even as nearly every other good and service has become more expensive in the post-COVID inflationary environment. Real prices for unlimited wireless plans fell by 10.7% last year and are down nearly 35% over the past five years.
Affordable prepaid plans are also moving in the right direction, with real prices down 2.6% last year and more than 51% over five years. Moreover, consumers and businesses are getting more for less with faster speeds and more network options.
For small business owners, wireless affordability is a good news savings and value story. Wireless service is a core business tool.
Small businesses rely on mobile connectivity every day to communicate with customers, schedule appointments, process payments, coordinate deliveries, and so much more. This is why falling costs are especially important in today’s economy.
Inflation remains a top concern on Main Street. According to SBE Council’s most recent “Small Business Check Up Survey,” 73% of small business owners remain concerned about inflation and 37% rank it among the top three economic issues facing their business.
Unfortunately, those concerns have been recently validated via the latest inflation data. Consumer prices rose 3.8% in April from a year earlier, the highest increase in three years. From energy and rent to insurance, small businesses continue to absorb higher expenses while trying to keep prices competitive for their customers.
Wireless affordability is a meaningful cost-relief story. The affordability and value of this important service show what can happen when investment and sound policy are allowed to work. More capital allocated toward investment and innovation – made possible through pro-investment tax and regulatory policies – continues to produce good outcomes for consumers. Wireless providers are competing aggressively for customers by expanding plan options and delivering better value. Of course, small businesses benefit directly from that competition.
But…government taxes and fees undermine affordability. CTIA’s report finds that taxes and government surcharges now make up a record 27.6% of the average wireless bill. These fees have continued to climb even as wireless service itself has become less expensive. For small businesses with multiple lines, these added costs can quickly add up.
Policymakers should not undermine one of the few affordability success stories in the economy. Wireless connectivity is essential infrastructure for entrepreneurs and their businesses, and government should be working to make it more affordable, not less.
As inflation continues to pressure Main Street, policymakers at every level should examine the growing tax and fee burden on wireless bills. Reducing excessive government-imposed charges would help small business owners preserve capital, invest in growth, serve customers, and remain competitive in a challenging economy.
Wireless competition is delivering lower costs and better service. Government at all levels needs to do all it can to support affordability and access to the critical communication tools Americans depend on each and every day.
Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council
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