It's No Urban Legend, FCC Likely To Tax VoIP

from the the-republican-led-FCC dept

Given the telcos' newfound love of laissez-faire, who's taking bets on whether they'll stand up against an FCC proposal to start levying taxes on VoIP providers? This has been coming down the line for some time now, though it looks set to happen with the appointment of a third Republican to the FCC. Now before you start wondering whether you've fallen into an alternate universe where Republicans favor higher taxes, take note that he's a former telco lawyer (breathe, order restored). The arguments against VoIP's classification as a telecom service, and thus compelled to pay Univeral Service Fees, barely need restatement, as it's arbitrary to view voice data as different from emails or any other online services. This will only get trickier as voice gets closer to being completely free, like when two people talk over AIM or Skype. Will they move to tax those services as Universal Service Fees continue to dry up? Considering that the government just lifted the 108-year old phone tax to pay for the Spanish-American War, it's obvious the government won't go down easily in its quest for cash.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    B1gB3n, Jun 1st, 2006 @ 9:13am


    The government doesn't even know what VOIP stands for, all they see is dollar signs!

    reply to this | link to this | view in thread ]

  2. identicon
    NSMike, Jun 1st, 2006 @ 9:20am


    Despite the huge differences between Ventrilo and VoIP, I use Vent almost exclusively to talk to those people whom I communicate with the most. Everything else is relegated to my cell phone.

    reply to this | link to this | view in thread ]

  3. identicon
    dorpus, Jun 1st, 2006 @ 9:25am

    Free web site hosting service?

    Incidentally, can anyone suggest a good place to put up a web site for free? I'm running into data capacity issues at Geocities, and I'd rather not pay for the upgrade.


    reply to this | link to this | view in thread ]

  4. identicon
    David, Jun 1st, 2006 @ 9:57am

    Matter of time for other taxes

    It won't be long before they realize that if they can tax VOIP, even though it is just more Internet traffic, then they can tax any other kind of data. E-Postage on email, tiered Internet, downloading music tax (to benefit the artists, of course). This will lead to a plethora of taxes.

    Hate to sound paranoid, but this doesn't seem like a money thing any more. It looks more and more like something designed to limit freedoms we have long taken for granted. The government can't come out and take them away directly, but it can make it too expensive to exercise them.

    reply to this | link to this | view in thread ]

  5. identicon
    Capitan Bijou, Jun 1st, 2006 @ 10:03am

    Taxes are Good!

    Lets all go to the Boston Harbour and dump our vonage boxes into the Sea!! Angry young to middle aged IT geeks will lead the new revolution!

    reply to this | link to this | view in thread ]

  6. identicon
    Kevin, Jun 1st, 2006 @ 10:35am

    They are all corrupt

    It's not republicans, it's not democrats, it's both of them. Everyone is office is corrupt, and until we realize that, nothing is going to get done about it. Politicians suck.

    reply to this | link to this | view in thread ]

  7. identicon
    Capitan Bijou, Jun 1st, 2006 @ 10:43am

    Re: They are all corrupt

    In the words of Lewis Black, "Republicans are the party of bad ideas, and the Democrats are the party of no ideas. A Republican stands up and congress and says "I got a really bad idea", A Democrat stands up and yells "And I know how to make it even sh1tt1er.""

    reply to this | link to this | view in thread ]

  8. identicon
    Dreamcaster, Jun 1st, 2006 @ 10:45am

    Re: Matter of time for other taxes

    I swear if they start taxing things like email, someone's gonna get it. Literally half my life is lived on the internet.

    The government no longer tries to keep money for the people, they're trying to line their own pockets and pay for this stupid war that shouldn't ever have happened. It's disgusting.

    reply to this | link to this | view in thread ]

  9. identicon
    ZA, Jun 1st, 2006 @ 10:54am

    Re: Matter of time for other taxes

    Pretty soon we are going to be taxed on the air we breathe. I'm sure it won't be long before they figure out how to tax other Internet communication. We will all be required to install a meter on our broadband modems. The government would hire people to come and read your "Broadband Meter" so we can pay by MB of communication.

    I have had it with these people. How could we be paying $3.00 per gallon of gas when we just conquered the most oil-rich nation in the world?

    I don't get it (shaking head).

    reply to this | link to this | view in thread ]

  10. identicon
    Scott, Jun 1st, 2006 @ 11:25am

    Re: Re: Matter of time for other taxes

    Wow, when did we conquer Saudi Arabia?

    reply to this | link to this | view in thread ]

  11. identicon
    Chicken, Jun 1st, 2006 @ 11:32am

    Re: Re: They are all corrupt

    Lewis Black rocks!

    reply to this | link to this | view in thread ]

  12. identicon
    Wolfger, Jun 1st, 2006 @ 11:34am


    It's not VoIP, it's voice-enabled IM!
    Loopholes abound.
    Since the government ruled that internet communications do not have protection from surveilance like phone lines do, I think they'll be hard pressed to justify taxing internet communications as though it were a phone line. Then again, since when to politicians ever justify their actions?

    reply to this | link to this | view in thread ]

  13. identicon
    drkkgt, Jun 1st, 2006 @ 11:43am

    Mark Twain said it best, although he should have included all politicians:

    Suppose you were an idiot and suppose you were a member of Congress. But I repeat myself.

    reply to this | link to this | view in thread ]

  14. identicon
    ET, Jun 1st, 2006 @ 11:46am

    Taxes Schmaxes

    So they are planning to tax VoIP... Whoopee... that's no news... everyone knew in the back of their mind this was bound to happen sooner or later...

    Not that I totally agree with it, but VoIP is a form of telecom, not pure data, not just an information service... and that means Universal Service Funds and the like will sooner or later be applied. And governments will be governments... as far back as the ancient Greeks and Romans, governments have been looking to tax every little thing they possibly can. Throughout history people have grumbled over it, but nobody has ever succeeded in standing up against it and nobody ever will, I am sure.

    The taxation of VoIP does not necessarily mean email will ever be taxed... email is included in your Internet connection fee... and that one is taxed (albeit regular sales tax only)... so theoretically, you are paying for your email traffic right there. It's like "Free" long distance on cell phones... no, it's not free, it's "included" in your monhtly bill.

    I hope they don't start taxing VoIP, but I'm afraid it's only a matter of time before they do so.

    reply to this | link to this | view in thread ]

  15. identicon
    bottomfeeder, Jun 1st, 2006 @ 11:58am

    "Pretty soon we are going to be taxed on the air we breathe."

    What do you think pays for the EPA?

    reply to this | link to this | view in thread ]

  16. identicon
    David, Jun 1st, 2006 @ 12:46pm

    Re: Re: Matter of time for other taxes

    So the solution might be to drop a few bombs on the most bandwidth-rich country in the world?

    reply to this | link to this | view in thread ]

  17. identicon
    Jon Ogg, Jun 1st, 2006 @ 12:54pm

    Without Surprise They Will Tax VoIP

    Congress has much of its laws and bills written by industry leaders. The current regulatory sustem is one built for big business, of big business, and by big business. I think after they made VoIP tax writing on the wall for an e-911 fee the ball was already rolling. I hope they dco not allolw the telcos and fiber owners to start slowing down non-paying sites, but I do expect that the majors will get to dictate a lot of the terms. There is a white knight though, they are facing an onslaught by cable companies and the speeds on cable are trying to bury what can be done of copper wires. Whatever the outcome, it will probably be a little painful for industries that do not own their own copper and fiber lanes.

    reply to this | link to this | view in thread ]

  18. identicon
    evhershey, Jun 1st, 2006 @ 1:41pm

    Not a big deal

    This is not really a big deal. Most VoIP is already taxed as a percentage of the monthly bill. My tax on the $25 vonage package is already between $3 and $4 per month. The Universal Service Fund tax (USF) which is mentioned in the article is usually around $.50 per month.

    The majority of the additional cost on a standard phone bill is Fees rather than taxes. The biggest being the Subscriber Line Charge (sometimes called something else similar) that is around $6.50 per month. This is not a tax at all, but is a fee that the Telcos are allowed to keep as extra profit, as is the Local Number Portability charge (LNP).

    So, it is really up to the VoIP providers to decide if they want to charge us those additional fees once they are allowed to by the FCC.

    Here is a little info on standard Telco taxes and fees from the FCC website -

    reply to this | link to this | view in thread ]

  19. identicon
    Anonymous Coward, Jun 1st, 2006 @ 2:52pm

    You're joking, right? I just got a notice from the Feds that the Spanish American War has ended!

    reply to this | link to this | view in thread ]

  20. identicon
    Jeremey Barrett, Jun 1st, 2006 @ 2:52pm

    Internet != PSTN

    Despite our government's wishes to the contrary, we don't actually pay taxes simply for existing. We ostensibly pay taxes as a means of paying for services which our government provides to us. Ignoring the question of whether or not we're getting our money's worth, the issue with VoIP is that government is providing no service whatsoever. So a VoIP tax is a tax on existence, which is fundamentally flawed at any price. If the mob comes to extort 50 cents a week from you, instead of a hundred bucks, that's ok?

    reply to this | link to this | view in thread ]

  21. identicon
    lestat, Jun 2nd, 2006 @ 2:03am

    wow nice one gov, i guess with this money "we" gonna feed more freeloaders in africa and etc.

    reply to this | link to this | view in thread ]

  22. identicon
    Thomas Schafer, Aug 11th, 2006 @ 1:49am


    This Country has to classes now! Rich and the Poor,just the way Bush wants it.

    If the F.C.C. taxes V.O.I.P. SERVICES it is wrong, because this technology is still not prooven as a soild service. All V.O.I.P. PROVIDERS have problems.


    Their would be more than enough money in the "pool" for everyone in this country.

    The way this contry is going it looks like GM, Ford, ect. will be no more soon and will be climbing over the fence Bush is building at the Mexico border we will be climbing over to get jobs when China takes over.


    Tom Schafer
    Local 8-215 O.C.A.W.
    DISPLACED WORKER (no jobs in my trade)

    reply to this | link to this | view in thread ]

  23. identicon
    PostersCorner, Dec 9th, 2006 @ 1:22am

    Not Surprised

    I am not surprised by this at all. Not one bit. What is unfortunate is that there probably wont be enough of an outcry to stop this since the number using these services is no where near the normal land lines

    reply to this | link to this | view in thread ]

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