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FCC Mulls Taxing VOIP Calls

By Paula Musich  |  Posted 2006-06-01 Print this article Print

The FCC's new proposal to have VOIP providers pay dues to a service fund could raise the cost of VOIP services.

Businesses that moved to voice over IP calling services to lower their phone bills could see a portion of their savings disappear if the most recent FCC proposal to add VOIP services to the Universal Service Fund is adopted.

FCC Chairman Kevin Martin proposed recently that VOIP service providers such as Vonage, Skype and others begin paying 10.9 percent of 65 percent of their revenues into the USF.

The fund, which overall collects about $7 billion from interstate and international calls, is used to subsidize the cost of providing phone services to poor and rural customers.

It will lose as much as $350 million starting in August when DSL and other broadband Internet access services become exempt from having to contribute to the fund, according to Staci Pies, president of the VON Coaltion, an advocacy group for VOIP service and equipment providers.

At the same time, Chairman Martin's proposal also includes raising the rate at which wireless carriers pay into the fund. While they currently pay based on 28.5 percent of their revenues, that percentage would increase to 37.1 percent under the new proposal, according to reports.

Although it's impossible to measure how much of their VOIP traffic represents interstate calls, the VOIP service providers say 65 percent is way off the mark.

"We're not sure where the commission is coming up with the numbers. We have yet to come up with something that points to 65 percent of revenues being interstate," said Pies.

"We don't have any reason to believe [VOIP] calling patterns are different than wireless or wireline. That becomes a discriminatory assessment based on whatever type of technology you're using to make your calls," she added.

Read the full story on eWEEK.com: FCC Mulls Taxing VOIP Calls

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