more on Internet Phone Providers Must Pay Government Fees, FCC Says

[David Farber <dave () farber net>]

Begin forwarded message:

From: Simon Higgs <simon () higgs com>
Date: June 23, 2006 3:05:03 PM EDT
To: dave () farber net, stan () colventures com
Subject: Re: [IP] Internet Phone Providers Must Pay Government Fees,  
FCC Says
Reply-To: simon () higgs com

Dave,

Except the FCC has forgotten that there is no long distance revenue  
from VOIP. The whole point of VOIP is that trunk routes are routed  
over the Internet. There is only local loop revenue to interconnect  
to the PSTN/POTS network with "real" phone numbers.

Having said that, several area codes for "real" phone numbers are not  
part of the PSTN/POTS and exist solely within the VOIP world, such as  
(056) in the UK.

Simon

David Farber wrote:
> Begin forwarded message:
> From: Stan Hanks <stan () colventures com>
> Date: June 21, 2006 1:37:44 PM EDT
> To: dave () farber net
> Subject: Internet Phone Providers Must Pay Government Fees, FCC Says
> I personally find no surprise in this. I have long maintained -- and
> advised clients and portfolio companies alike -- that The Powers  
> That Be
> were going to apply the "duck test" to VoIP-based telephone companies.
> That is, if it looks like a duck, it swims like a duck and it quacks
> like a duck, then by gosh it must BE a duck!
> Once you start offering direct inbound dial phone service with "real
> phone numbers", and you're connected to the rest of the public  
> switched
> telephone network, you *ARE* a "telephone company" under any  
> reasonable
> interpretation and as such should be subject to the same rules and
> proceedings to which any other telephone company is subject. Whether
> your transmit signals over copper plant that you've owned since the
> 1800s or via broadband wireless using VoIP is irrelevant.
> That said, as long as you're operating in your own "island of
> connectivity", you should be completely free to do whatever the  
> heck it
> is that you want to do without interference from the FCC or any other
> regulatory body. The problem is, under that scenario, you have a  
> really,
> really hard time talking to anyone outside your little world.
> Stan
> ---------
> Internet Phone Providers Must Pay Government Fees, FCC Says
> 2006-06-21 12:16 (New York)
> By Molly Peterson
>      June 21 (Bloomberg) -- Vonage Holdings Corp. and other  
> providers of
> Internet-based telephone service must help subsidize services in rural
> and low-income areas, U.S.
> regulators said.
>      A rule adopted today by the Federal Communications Commission
> requires providers of voice-over Internet protocol, or VOIP,  
> service to
> contribute 10.5 percent of their long- distance revenue to the  
> Universal
> Service Fund if the calls pass through traditional phone networks.
> Mobile-phone companies such as Cingular Wireless LLC may have to pay
> more as well.
>      ``We take these actions because we recognize the changing
> telecommunications marketplace,'' FCC Chairman Kevin Martin said  
> during
> a meeting today. The rule is an interim measure that will help  
> maintain
> the stability of the fund while the commission works to create a
> long-term, ``technology-neutral'' contribution system, Martin told
> reporters after the meeting.
>      The rule, approved unanimously, is part of an FCC effort to
> restructure the U.S. Universal Service program. It is funded by
> long-distance surcharges and the revenue base has declined in recent
> years as calling costs have dropped and competition has increased. The
> program also funds Internet access in schools and libraries.
>      The FCC now requires established carriers such as AT&T Inc.
> and Verizon Communications Inc. and mobile-service companies including
> Cingular Wireless LLC to pay 10.9 percent of long- distance revenue  
> into
> the fund. The contribution for all carriers is scheduled drop to 10.5
> percent on July 1. The companies say Web-based providers shouldn't be
> exempt.
>      The new rule requires Internet-phone companies to pay Universal
> Service fees on as much as 64.9 percent of their revenue. The rule  
> also
> increases, from 28.5 percent to 37.1 percent, the maximum amount of
> mobile-phone revenue that is subject to the tax. The rule won't change
> the methods for calculating traditional carriers' contributions.
> --Editor: Golum (tlb)
> -------------------------------------
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--
Best Regards,

Simon Higgs


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