CenturyLink (NYSE: CTL) is appealing a Multnomah County Circuit Court judge's ruling that upheld a move by the city of Portland, Ore., to implement a new tax on wireline phone services.
Both of Portland's dominant wireline telcos CenturyLink and Frontier (Nasdaq: FTR) are required to pay the city 5 percent of their gross revenues from traditional POTS voice service.
Last November, Portland's city council voted to approve the expanded tax, which they said is designed to raise $3-5 million in revenue for mandated police department reforms.
In January, CenturyLink filed a lawsuit against the city over the tax. However, in May, a Multnomah County Circuit Court judge ruled against the telco, which has already added the new tax on its customer's monthly phone bills.
The city and CenturyLink had different interpretations of how high the new fees would be on customer bills. According to the city, the new charges should be between $3.84 and $9.24 annually, while CenturyLink says the charges will be between $5.52 and $19.44 annually.
These new fees come at a time when landline voice service use continues to decline. Consumers in Oregon and throughout the United States are cutting their PSTN line in favor of wireless or VoIP-based services such as Skype or Vonage (NYSE: VG). As of 2011, the state's landline subscriber base was 631,000, down from 1.5 million in 2002.
For more:
- The Oregonian has this article
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