Get Ready To Pay A VoIP Tax

The feds are about to put their hands in your pocket again. FCC Chairman Kevin Martin is recommending that VoIP providers pay a 7% tax, and you can be sure that they'll pass that cost along to you....

June 1, 2006

1 Min Read
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The feds are about to put their hands in your pocket again. FCC Chairman Kevin Martin is recommending that VoIP providers pay a 7% tax, and you can be sure that they'll pass that cost along to you. CNet reports that Martin's proposal would require VoIP providers to pay the tax to the Universal Service Fund (USF), which subsidizes telecom services in rural and low-income regions, schools, and libraries.

Jim Kohlenberger, executive director of the VoIP industry's VON Coalition, told CNet that the proposal would have Internet phone companies pay 7 percent of their customers' monthly bills. That adds up to $1.75 for an average $25 bill. VoIP providers would most certainly pass those costs along to their customers.

Why the FCC proposal? There's a $350 million shortfall in the USF. Most galling of all is the reason for that shortfall: Last year the FCC declassified DSL as a "telecommunications service." So those who use DSL don't pay into the fund. Hence the shortfall.

Now, the FCC is considering taking it out of the hides of VoIP users.

There's a simple reason for this. Verizon and other big telcos give massive amounts of money to Congressmen, and wield big power in D.C. VoIP companies don't.The FCC is slated to make a decision on this at its June 15 meeting. Stay tuned for more.

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