The Tax Man Rings Twice

I guess we always realized it was just a matter of time before the government reached out the hairy palm for taxes on wireless and internet-based telephone traffic. Certainly there have been enough spam messages circulating about every six months over the past few years claiming it had actually occurred. Before, it was a false alarm. Now it’s reality.

The Federal Communications Commission voted unanimously at its monthly meeting to require all voice over Internet Protocol (VoIP)services that connect to the public-switched telephone network–as opposed to using peer-to-peer technology, like Skype–to contribute to the Universal Service Fund. This news appeared in a release today on CNet News.

The $7.3 billion fund, which has been a feature of U.S. policy for more than 70 years, subsidizes telephone service in rural and low-income areas, and provides discounted Internet and phone service to schools and libraries. The same FCC order would also raise the share that cell phone providers must contribute to the pool.

The FCC’s decision drew applause from the U.S. Telecom Association, which represents both large and small telephone companies, according to the release. “We applaud today’s ruling for ensuring that all voice service providers are treated alike,” Walter McCormick, the organization’s CEO, said in a statement.

By one VoIP industry estimate, customers could owe as much as $2.12 extra on a $30 monthly bill because of the changes, according to Jim Kohlenberger, executive director of the VON Coalition, which represents the Internet phone industry. I don’t make any guarantees about my math skills, but that looks like a 7% increase to me. Adjust your budgets accordingly. You should see the increase showing up on your bills sometime this summer.


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