Illinois Supreme Court eliminates wireless tax

The Illinois Supreme Court yesterday upheld a lower court ruling that the City of Chicago cannot collect right-of-way fees from wireless telephone providers, a move that could lower wireless customers’ bills 2%.

The court upheld a January 2000 circuit court ruling that wireless companies should not be forced to pay the municipal charges, because they do not own the underground network.

“It would be absurd to impose such a fee on wireless providers who do not own, operate or maintain any equipment within the public right of way,” the Court wrote in its unanimous opinion.

PrimeCo Personal Communications and U.S. Cellular brought the suit in response to a 1998 Illinois law that permitted municipalities to include wireless providers among land-based telephone companies that are charged right-of-way fees.

A spokeswoman for the City of Chicago’s law department said the latest available figures show that in 1999, the city collected $45 million in fees, but that only $10 million came from wireless companies. U.S. Cellular--a plaintiff in the case--said the figure was closer to $30 million.

In either case, the spokeswoman said that of the city’s more than $1 billion total budget, the decision would not impact harshly upon total revenues.

“We’re not pleased that we’re losing a source of revenue, but at the same time, it’s not such a significant amount that we have to worry about making ends meet,” the spokeswoman said. “The bulk of the money we collect from the fee comes from landlines providers anyway.”

The spokeswoman also said that because the lower-court judge questioned the constitutionality of the entire state right-of-way fee collection law, the city was pleased it only had to surrender the smaller wireless percentage.

Eva Wohn, vice president of external affairs at U.S. Cellular, said today the ruling would affect more than just Chicago residents.

“It’s going to be a really important precedent, not only in Illinois, but elsewhere in the country,” Wohn said. “Various municipalities have been trying on and off in various states to make wireless pay for right of way.”