Cable VoIP Revs Added to Phone Fund
By John Eggerton -- Broadcasting & Cable, 6/21/2006 7:06:00 AM
The FCC voted Wednesday to require VoIP (voice over Internet protocol) cable phone service providers to pay into the Universal Service Fund.
The fund was started to help foot the bill for telephone service to poorer, rural, and underserved areas. FCC Chairman Martin had backed making cable pay into the fund for its phone service on almost two thirds of its VoIP revenue, rather than the about 28 percent it had been voluntarily paying into it, the same rate as wireless carriers.
Since its decision last year that broadband service providers aren't going to have to pay into the fund, the FCC was looking for a way by this month to replace that anticipated shortfall.
The decision also raises wireless contributions from a maximum of about 28% to about 37% of their revenue, reflecting the rise in interstate wireless calls (the fund is based on long-distance revenues).
Martin said that he could have made VoIP providers pay on 100% of their revenue, since it is almost entirely interstate.
FCC Commissioner Michael Copps expressed disappointment that broadband had been taken out of the mix, particularly since one of the government's stated priorities, and part of the impetus behind franchise reform bills now in Congress, was extending Internet access to underserved areas.
Elsewhere, the House Telecommunications Subcommittee is holding a hearing Wednesday on what direction Congress should give on the future of the USF fund, ranging from whether it should be maintained at all, to whether broadband revenues should be dunned as well.
The FCC last August removed telephone broadband service from revenues that can be taxed for the fund.
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