Universal Service Tax On VoIP Will Actually Hold Back Universal Service
from the nice-work-FCC dept
Daniel Berninger continues to write some of the sharpest pieces on what’s going on with the telco industry these days. In the past, he’d written up great pieces explaining why the the internet isn’t the internet without net neutrality, and why breaking net neutrality could end up harming the telcos. His latest writeup, over at Jeff Pulver’s blog, is in response to the silly decision by the FCC to tax phone replacement VoIP providers using the infamous “quacks like a duck” test, that says if a new technology (VoIP) is backwards compatible with an older technology (the phone system) then it deserves to be taxed as if it were that older system. Of course, this only encourages people to avoid compatibility altogether and slow down adoption of the new technology.
In this case, those new taxes are supposedly to support the “Universal Service Fund” that’s designed to bring phone service to rural areas and those who can’t afford service. So how’s the Universal Service Fund doing? That’s a damn good question — and, as Berninger notes in his open letter to Senator Ted Stevens and other Congressional folks, it’s not something many people want to talk about because the results aren’t very good. The Universal Service Fund hasn’t done very much at all to increase service, and the government isn’t even bothering to measure the results. All they track is how much money goes into the program — and not whether it’s successful in increasing access. Berninger shows how, with this new VoIP tax, it’s really about taking money from these upstarts who are actually providing cheap phone service and handing it over to the incumbent telcos who are providing expensive old phone service. Once again, it comes down to the real issue: the lack of competition in the telco world. Real competition drives new innovations and lower prices (like VoIP) that help increase access. Instead of encouraging that, we’re now forcing these VoIP companies to pay a big tax that goes straight to the incumbent telcos. That doesn’t help increase access to service — it slows it down.