FCC approves new Internet phone taxes...

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Jun 22, 2005
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(source: http://news.com.com/2100-7352_3-6086437.html)

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.

It also runs a controversy-plagued program called E-Rate that provides discounted Internet and phone service to schools and libraries.

Right now, only telecommunications services, including wireless, pay-phone, traditional telephone and DSL providers, are required to contribute a fixed percentage of their long-distance revenue to the multibillion-dollar fund. It had been unclear whether VoIP providers must also pay.

The same FCC order would also raise the share that cell phone providers must contribute to the pool, though it was not immediately clear how many consumers would see hikes or how much they would be. That's because the FCC
raised the contribution rate for only one of three formulas that can be used by cell phone companies to determine how much they owe.

If those companies choose to stick to the two unchanged formulas, their customers would likely see no additional fees.

"Certainly we're concerned whenever consumers are forced to pay higher government taxes or fees, but it depends on the carrier and what their approach is," said Joe Farren, a spokesman for CTIA-The Wireless Association, a trade group.

The new contribution scheme takes effect immediately, and any new fees would likely appear on customers' bills later this year, said Thomas Navin, chief of the FCC's Wireline Competition Bureau. He declined to speculate on the differences customers of each service may see on their bills, saying it would depend on a variety of factors and "there's not one typical scenario for me to paint for you."


By one VoIP industry estimate, customers could owe as much as $2.12 extra on a $30 monthly bill because of the changes, said Jim Kohlenberger, executive director of the VON Coalition, which represents the Internet phone industry. Traditional wireline users would pay $1.38 on a comparable bill, while wireless users pay an average of $1.21, he said.

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