Subsidizing yesterday's telephones

SUBSIDIZING YESTERDAY'S TELEPHONES
[SOURCE: Los Angeles Times, AUTHOR: Editorial Staff]
[Commentary] Local phone monopolies are trying to saddle high-tech competitors with fees designed to subsidize the traditional phone network. At issue is how federal and state regulators will treat voice over Internet protocol, or VOIP, services like Vonage that use high-speed Internet connections, not conventional phone circuits, to transmit calls. So far, these services have been able to escape much of the byzantine regulation that permeates the telecommunications business. In particular, they've avoided the access charges that long-distance and wireless companies have to pay local phone companies when connecting to their customers. These charges not only cover the cost of connecting calls but also subsidize phone lines in rural and other high-cost areas. VOIP also has been exempt from federal and state "universal service" fees, another source of subsidies for traditional phone lines. Those exemptions are in danger, however. With the distinction between local and long-distance evaporating, the FCC has been struggling to phase out access charges and overhaul universal service. Rather than dragging VOIP services into the morass of subsidies for phone circuits, lawmakers and regulators should focus on pushing high-speed Internet connections to every U.S. home and business. If that means people using VOIP save a few bucks at the expense of those who use other phone services, so be it. With luck, VOIP will drive up the demand for broadband and hasten its spread, diminishing the need to subsidize plain old telephone lines.
http://www.latimes.com/news/printedition/opinion/la-ed-voip20jun20,1,486...
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