Opinion ID: 2530632
Heading Depth: 1
Heading Rank: 5

Heading: Taxes and Other Charges

Text: Under section 1(e) of the CSA, California residential consumers must pay all taxes, fees, surcharges and other charges that [AT & T] bill[s] [them] for the Services. Id. at 1650. As discussed supra, the UCC is a fee or charge that AT & T imposes on consumers in connection with their use of interstate and international telecommunications services. Neither party disputes that AT & T at all times charged its residential customers precisely the percentage listed in the [CSG]. Id. at 822. Although section 1(e) also provides that [t]axes and surcharges will be in the amounts that federal, state and local authorities require us to bill you, id. at 1650, this provision does not support the majority's contention that AT & T may not charge consumers more than the amount it is required to contribute to the Universal Service Fund (USF). First, this sentence does not apply to the UCC because, as the district court recognized, the UCC is not a tax or a surcharge. [4] See id. at 995 (holding, as a matter of law, that the CSA is unambiguous that the UCC is not a `surcharge' that is subject to the limitation set forth in ... § 1(e)); see also Federal-State Joint Bd. on Universal Serv., CC Docket No. 96-45, Report and Order, 12 FCC Rcd. 8776, 9211-12 ¶ 855 (1997) [hereinafter Report and Order ] (stating that the FCC believe[s] that it would be misleading for a carrier to characterize its [universal service] contribution as a surcharge because carriers retain the flexibility to structure their recovery of the costs of universal service in many ways); cf. Tex. Office of Pub. Util. Counsel v. FCC, 183 F.3d 393, 427 (5th Cir.1999) (finding, in dicta, that universal service contributions are not a tax) (citing Rural Tel. Coal. v. FCC, 838 F.2d 1307, 1314 (D.C.Cir.1988)). Second, even if the UCC were a tax or a surcharge, it would not be subject to this provision because the federal authorities do not require AT & T to bill consumers for the UCC. See Report and Order, 12 FCC Rcd. at 9199 ¶ 829 ([C]arriers will be permitted, but not required, to pass through their contributions to their interstate access and interexchange customers.); see also Boomer v. AT & T Corp., 309 F.3d 404, 411 n. 1 (7th Cir.2002) ([C]arriers may charge consumers to recover the cost of [universal service] contributions. (emphasis added)). Thus, under the plain language of the CSA and CSG, AT & T has not breached its contract because it charged the California residential consumers the specific UCC listed in the Rates and Charges section of the CSG. [5] See Aplt.App. at 772 (It is undisputed that AT & T charged its residential customers precisely the percentage listed in the [CSG].); id. at 822 (same).