VoIP tax is a sign of bad government, says reader

FCC's VoIP tax law gets reader hopping mad

VoIP, unified messaging, products and services

Last month, we alerted you to the FCC's rule mandating that VoIP providers, such as Vonage, must pay a 7% Universal Services Fund charge, adding to the ways VoIP is beginning to look more like traditional phone services from a regulatory perspective.

Robert, one of our loyal readers, wrote to us taking pointed exception to the FCC ruling. He said, "Regarding USF - this is ridiculous. It's another example of bad government. Having phone service isn't a right. It's a privilege."

He believes that providing universal phone service to subscribers who, in his words, "live in a swamp or on the other side of a [high] mountain range" should not be paid for by taxes.

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Last month, we alerted you to the FCC's rule mandating that VoIP providers, such as Vonage, must pay a 7% Universal Services Fund charge, adding to the ways VoIP is beginning to look more like traditional phone services from a regulatory perspective.

Robert, one of our loyal readers, wrote to us taking pointed exception to the FCC ruling. He said, "Regarding USF - this is ridiculous. It's another example of bad government. Having phone service isn't a right. It's a privilege."

He believes that providing universal phone service to subscribers who, in his words, "live in a swamp or on the other side of a [high] mountain range" should not be paid for by taxes.

Robert suggests that access to local phone service should be paid by those who choose to live in remote areas using an arrangement like a co-operative municipal district, which supplies rural areas with electricity or water.

Robert correctly observed that DSL subscribers are already taxed and that if VoIP rides on an already-taxed connection, it seems like double taxation.

First, we'd like to point out that the tax on DSL is going away next month - one reason that prompted the ruling adding the additional tax to VoIP.

Second, we'll leave the argument to the merits of universal service to our elected officials but we'd like to add a question of our own. How is it that phone service is considered a "universal privilege" by some public policy makers and broadband access to the Internet is not equally essential?

In our next newsletter we'll cover the core issue of how USF is being spent.

Read more about voip & convergence in Network World's VoIP & Convergence section.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Larry Hettick is a principal analyst at Current Analysis.