FCC Chief backs Net Phone Taxes

[SOURCE: C-Net|News.com, AUTHOR: Anne Broache]
Imposing new taxes on a wider swath of Internet phone users is likely to be one of the Federal Communications Commission's top priorities next year, Chairman Kevin Martin said Wednesday. The policy at issue is the thorny question of which phone service providers are forced to contribute to the Universal Service Fund, a multibillion-dollar pool of money that's used to subsidize telecommunications services in rural and other high-cost areas, schools and libraries. The mammoth fund -- $4.7 billion was distributed during the first nine months of this year--has been beset by charges of mismanagement and fraud during its seven-year history. Right now, long-distance, wireless, pay-phone and telephone services are required to contribute a fixed percentage of their revenues to the fund, which they do by tacking additional fees onto their customers' bills. But it still remains unclear how those taxes apply to voice over Internet Protocol (VoIP) providers. Some of those companies--particularly larger ones--already contribute to the fund, either directly or via the telephone companies whose wires they use to provide their services. Vonage, which has more than a million subscribers, imposes a "regulatory recovery fee" of $1.50 on each customer phone number. But without a mandate in place, government regulators and politicians say they fear that as technology like VoIP becomes more widespread as a traditional telephone replacement, the fund will shrink.

* FCC Chief Tells VoIP Firms More Regulation Is An Option



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