FCC initiates VoIP tax for Universal Service Fund

[David Farber <dave () farber net>]

do realize this tax is passed directly onto you and your bill.  djf

Begin forwarded message:

From: Chris Savage <chris.savage () CRBLAW COM>
Date: June 22, 2006 10:03:03 PM EDT
To: CYBERIA-L () LISTSERV AOL COM
Subject: Re: [CYBERIA] FCC initiates VoIP tax for Universal Service Fund
Reply-To: Law & Policy of Computer Communications <CYBERIA- 
L () LISTSERV AOL COM>

The FCC has a program called "universal service" pursuant to which  
telephone service customers pay extra (it's effectively, but not  
normally legally viewed as, a tax) to support providing serivce to  
people with disabilities, poor people, and people who live in places  
where it is very costly to provide phone service (think very rural  
Alaska, e.g.).

The statute says that the assessment of these fees "shall" be on all  
providers of interstate "telecommunications service" (a defined term  
in the Act), and, at the FCC's discretion, "may" be also imposed on  
providers of interstate "telecommunications" (a related, but  
different, defined term in the Act).

The FCC today announced a decision (formal ruling including details  
not out yet) that it was exercising its discretion to extend the  
payment obligation to certain "telecommunications" providers,  
specifically "interconnected VoIP" providers (like Vonage, or skype- 
out, but not plain old skype).

They also had a rule that said cellphone providers could assume that  
28.5% of their revenues were subject to the fee, and they upped that  
to 37.1%.

The details can't really be sorted out until they release the actual  
order, not just a press release.

Chris S.

________________________________

From: Law & Policy of Computer Communications on behalf of Stephen T.  
Middlebrook
Sent: Thu 6/22/2006 4:45 PM
To: CYBERIA-L () LISTSERV AOL COM
Subject: FCC initiates VoIP tax for Universal Service Fund



Talk about vague.  Anybody know the real scoop?  stm

http://seattletimes.nwsource.com/html/businesstechnology/ 
2003077279_fccvoipfees22.html

WASHINGTON ? Some cellphone and Internet phone users will see higher  
bills
this year because of a move Wednesday by the Federal Communications
Commission (FCC) to ensure phone service for rural and disabled people.
The commission could not predict how many people would see an  
increase or
how much more they would pay.
Specifically, the FCC took interim steps to avoid a financial crisis in
the Universal Service Fund that supports service for rural and disabled
people.
The commission required that providers of Internet phone service begin
contributing to the fund.
It also required that cellphone companies and other wireless providers
that opt to pay a flat contribution instead of one based on actual usage
assume that 37.1 percent, instead of 28.5 percent, of their revenue is
subject to the tax.
The actions were designed to make up temporarily for the loss of revenue
for the fund from providers of high-speed Internet service over phone
lines, or Digital Subscriber Lines (DSL).
DSL providers were exempted by the FCC in August, which FCC Commissioner
Michael Copps estimated cost the fund $350 million a year


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