FCC Approves New Internet Phone Taxes

basotl writes to tell us CNet is reporting that the FCC has approved a new round of taxes for internet phone service. Some 4 million users could receive this nasty little surprise as early as their next monthly bill. From the article: "The VoIP industry wasn't alone in questioning the FCC's move. In a letter sent last week to commissioners, attorneys for the U.S. Small Business Administration urged the agency to postpone its action until it had done a thorough analysis of the economic effect on smaller providers."

Trust the FCC...

To think up a way of taxing virtually-free phone calls.

Re:Trust the FCC...

The rationale is that they're "protecting competition", by making the taxes equal.

In other words, the established phone companies out-lobbied the startups.

The very notion that a nation with a First Ammendment needs a "Federal Communications Commission" is absurd. It's one thing to manage RF bandwidth, which was the FCC's original mandate... in the 1920's or 1930's. But they've expanded their mission to micromanaging every electronic communcation in the country, which, nowadays, includes just about everything. It's such an impossible task that they continue to pass new rules because the old ones are "broken". Of course, the new rules will quickly be "broken" too. And then they'll pass more.

I say, set up an eBay store to auction bandwidth, and close down the rest of the FCC. We can continue to pay the employees, that's not expensive compared to the damage they do when they're working.

Re:Trust the FCC...

Well, the FCC also regulates access to the medium. That doesn't create a First Ammendment conflict I think.

Where I live, there is one (1) AM station, and one (1) FM station. yet, I cannot get a license to transmit without paying huge fees, employing lawyers, installing ridiculous over-featured equipment (I'm a 1st class HAM operator and at one time held the 1st class FCC radiotelephone operator's license as well -- so I know what's required, in fact, I'm the very fellow you used to have to hire in order to ensure that your installation complied technically. You can broadcast a clean AM or FM signal for under a grand, easily.)

The fact is, the FCC has created a situation where exactly one (1) type of entity has access to the airwaves: The rich. Rich individuals or rich corporations, these are the only ones who can get on, and therefore, they 100% control what is said. Clearly, this is a 1st amendment issue.

For the love of God!

NO NEW TAXES PLEASE!

Re:For the love of God!

Bush the Elder didn't lie. He was out maneuvered by a Democrat-led Congress that sent a tax bill he had no chance of beating in a veto battle.

"Bush initially presented Congress a proposed budget containing steep spending cuts and no new taxes, but congressional Democrats dismissed this out of hand. . . . The alternative would have been to veto any budget bill that came out of Congress, risking a potential government shutdown and possibly triggering the automatic cuts of the Gramm-Rudman-Hollings Deficit Reduction Act. . . . [Eventually,] Bush agreed to a new resolution, and soon after the Omnibus Budget Reconciliation Act of 1990 was finally passed. This new proposal replaced some of the fuel taxes with a 10% surtax on the top income tax bracket (thus raising the top marginal tax rate to 31%) and also included new excise taxes on alcohol and tobacco products, automobiles and luxury yachts."[1]

It is worth mentioning that Bush (or any President) is not able to pass tax legislation. That's for Congress. He can make recomendations and he can veto (not that he has yet, AFAIK), but he can't enact legislation.

[1]: http://en.wikipedia.org/wiki/Read_my_lips:_No_new_ taxes [wikipedia.org]

I hate extraneous taxes...

...but at least Vonage is still cheaper than Comcast or AT&T

Re:I hate extraneous taxes...

OTOH Vonage has some drawbacks... Here in El Paso, TX, retailers like Best Buy are selling Vonage's VoIP appliances on endcap displays and offering great rebate deals - and it's not until you bring the thing home, unpack it and try to sign up that you find out Vonage can't give you a phone # in El Paso's 915 area code.

Re:I hate extraneous taxes...

You get your investment advice from a guy that screams a lot and has a soundboard full of afternoon radio-show sound effects?

so why didn't they tax the rest of the internet?

A VoIP call is just another internet connection between two individuals, sending data back and forth. What makes VoIP so special that it needs taxation? Are they going to tax internet video conferencing and Netmeeting next? Instant messaging? Just another example of old people in government not understanding the differences in new technology.

Oh also that fund that is supposed to "subsidize" rural areas is such a waste. My parents have lived in a rural area for years without DSL and it wasn't made available until a couple years ago. And then, it's 128kbps and it wasn't funded by this stupid fund, but by the local telephone co-op. I'd rather the tax go away.

Re:so why didn't they tax the rest of the internet

If they tax VOIP and not other data, then I want a refund for my YEARS of dialup, when my phone line was used for data and not voice.

Thought experiment.

I wonder what they'd to if someone made this set up:

You speak into a microphone and a speach-to-text program IMs the words to your friend's computer which then reads them aloud. Is that voip? Taxable?

-Grey [wellingtongrey.net]

Re:so why didn't they tax the rest of the internet

A VoIP call is just another internet connection between two individuals, sending data back and forth. What makes VoIP so special that it needs taxation? Are they going to tax internet video conferencing and Netmeeting next? Instant messaging? Just another example of old people in government not understanding the differences in new technology.

If you would have read TFA, you would have found out that they are only taxing calls made to the PSTN, not internet only calls. I don't have a problem with that. I do, however, have a problem with the rate discrepency between VoIP companies vs the Bells vs the cell companies. VoIP companies are paying double the amount the incumbents are paying based on an arbitrary percentage (a number not justified in any sort of way).

Oh also that fund that is supposed to "subsidize" rural areas is such a waste. My parents have lived in a rural area for years without DSL and it wasn't made available until a couple years ago. And then, it's 128kbps and it wasn't funded by this stupid fund, but by the local telephone co-op. I'd rather the tax go away.

The rural telephone co-ops in my area are heavily subsidized by Universal Service Funds. I am 99% certain that your DSL is funded by USF.

DAMMIT!

Would it kill the FCC to allow us to communicate WITHOUT paying protection money?

This outfit is getting entirely too powerful. This crap has to stop.

Civics?

Does the FCC have the authority to levy taxes? Isn't the FCC an executive agency? Have we stopped even pretending that we have a constitutional government?

-Peter

Re:Civics?

Does the FCC have the authority to levy taxes? Isn't the FCC an executive agency? Have we stopped even pretending that we have a constitutional government?

It is not a tax - it is a fee - look at what your bill says. There is no real difference but the name does count becsue agencies can charge fees - and most do.

VOIP has been getting a free ride since they can connect with the landline but have avoided the fee - I'd like to see them junk the fee but that won't happen. It's a good thing that Repiblicans are for less government and working on important issues like banning gay marriage instead of worrying about what they've done to our economy. Where is Goldwater when the Republicans really need him.

From a personal perspective, VOIP is still cheaper since I have a phone in Eiurope and the US and all calls are local.

Re:Civics?

The poster is exactly right. The executive branch of every government (local, state, federal) levies taxes without consulting the legislature all the time, getting around little roadblocks like the Constitution by calling them 'fees'. Apparently if you call it a 'fee' rather than a tax then you can do whatever the fuck you want. This is especially true if you limit your fees to specific groups of the electorate who lack the power (or votes) to protest effectively against this sort of thing.

The sad thing is that most people are perfectly okay with this so long as they aren't the ones getting the shaft. And when their turn comes around their neighbors simply see it as payback for the fees THEY had to pay at some point for some government service that they used (or a commercial service the government decided to tax...er, levy 'fees' against). Basically it's a "I didn't hear you complaining when I had to pay fucking fee X for service Y, so don't expect me to speak up on your behalf now that you're the one being roughed by the government protection racket - asshole."

Good luck trying to change things. Governments are as addicted to their fees as smack whores are to heroin - and they've got the guns (metaphorically and literally) to make sure you can't do shit about it.

Max

DSL double dipping?

Dont you already get charged Telecomm taxes if you have DSL, since its basically a phone line anyway?

( i dont have DSL, so no, i cant go look at my bill )

Double taxation

Do they not aleady get a cut on the internet access (cable or DSL)? Is this not double taxation?

What really irritates me about this tax

is that I'm already paying communications taxes (of various sorts levied by various taxing bodies) on my Internet connection. Actually, in my case it's a significant chunk of my monthly bill. In any event, this is a discriminatory tax squarely aimed at smaller companies providing an Internet-based service that inconveniences the incumbent telephone companies. So far as I'm concerned it's double-taxation as well, if I happen to use a VoIP service. Way to go, FCC. Let's just open the door to taxing everything on the Internet ... if you can tax me because I happen to use packets formatted for this purpose, what stops the government from taxing packets formatted some other way. Ridiculous on the face of it.

This is a slippery slope.

So what about audio chat inside online computer games? I can talk to other players in - how is that different from telephony?

If I'm taxed for talking to someone using VOIP but not when I happen to be playing a game at the time - then maybe VOIP providers should include a copy of PONG that you can play with the other person while you talk to them?

The idea that you can tax bytes that contain the human voice in realtime - but you don't tax bytes that contain pictures, or human voice that was recorded a few hours ago...of all the millions of uses for data sent over the Internet - why should realtime human voice be singled out as special. It's just silly.

We either need to tax ALL data transfers over shared communications links or NONE of them. Repeal the tax on telephony or tax broadband the same way you tax dialled telephony - there is no practical difference.

Hmmm - so if I use dialup to connect to the Internet - and then use VOIP - do I get taxed twice? I think that's probably illegal.

The lawyers will make a fortune arguing this one.

WTF

Shouldn't we have gotten to vote on this? Or at least been given a little pamphlet of information about it before hand? WTF!!!

you can't enforce it.

thanks alot FCC, I shall now make a fortune selling ssh stunnels to canada dedicated to "media traffic".

Semantics

Its a fee, not a tax. Only Congress can levy taxes.

Damn the FCC

Damn it, and I just got my VoicePulse account, which is already expensive with the two lines. Now it has to be more??

Questionable conversion rate

FTA:

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.

The above is due (FTA) to the fact that the FCC assumes ~65% of VOIP calls are long distance, while less than 30% of wireline and wireless calls are long distance. That makes it sound (to me) like some underhanded lobbying was involved.

In fairness, VOIP that does not connect to the POTS system (e.g. p2p calls) should be excluded as it does not use the same infrastructure and thus should not face the same tax burden. In fact, services such as Skype are excluded from the taxes for this exact reason, so some calculation should be made to determine the percentage of VOIP calls that never touch the POTS system. Other than that, I don't see any reason that VOIP services that use the same resources as the POTS carriers should be granted special exemption from the taxes collected for consuming the same services/infrastructure.

On a side note, my first impression from the summary was that the FCC was levying new taxes specifically against VOIP providers. I got the impression that the FCC was creating new taxes (No taxation without representation!) and that really pissed me off. Upon reading the actual article, that was definitely the implication, however the facts make it obvious that these are existing taxes and VOIP services are only being reclassified so that they fall under the same category as other voice carriers Anyone who thinks they don't -- specifically for services that access the POTS system, not p2p like skype and vonage to vonage calls -- is either ignorant or in denial. Of course, the conversion rate seems extremely off and weighted toward the destruction of VOIP and there doesn't seem to be an allowance for VOIP to VOIP calls which should bypass the regulation. I'm pissed about the extremely questionable fairness of this proclamation, but please present the facts without insinuating that things are happening (FCC creating new tax laws) which are clearly not.

TFA says it's only when you connect to PSTN

According to the article, the FCC is imposing a fee if and when the VOIP call interfaces with the PSTN network, ie. when one or more of the parties is using legacy telephone service. The fee does not apply to pure VOIP calls. Unfortunately, it isn't clear if a provider must pay the fee if it *ever* connects to PSTN, or only on a per-call basis. If it's the former, then this is really ridiculous. If it's the latter, then this may make some semblance of sense, annoying though it is. Anybody know which it is?

for the People, by the People....

I bet its not hard to figure out which people this is for...

RTFA: the cure for knee-jerk

- They are not adding a new tax (which would be illegal), they are including a new business under an old tax.
- Only affects carriers who access the phone system, hence not the same as peer-to-peer calls or video game chat, etc, etc.

FCC overstepping its boundaries, class action suit

The FCC seems again try to overstep the legal boundaries of its authority. In fact, the legislative underpinnings of the FCC's foundation have become increasingly questionable and, contrary to widespread believe, its authority does NOT extent to internet based personal communication, namely VoIP. This means that should the FCC try to collect taxes from VoIP users you can simply refuse to pay and take the matter to court. There is already a class action lawsuit underway that addresses this issue and that will most likely put a final end to the FCC's attempts to overstep its legal boundaries.

Prepaid taxes?

Do these taxes affect people who pay-as-you-go with skype and other voip services that don't have a monthly subscription?

How long before

How long before an encrypted and more discrete method avoids detection and gets under the radar thus avoiding the tax...

Internet Phone Taxes are no Different than...

The same taxes, tarrifs, mule-carried bits that the phone company has been dredging off of people for years. Ever take a vacation? I bet if you left your house for a month, you would probably still spend no less than $39.95 US for a phone you have never used.

Now, let's just add to that convenience by adding DSL service, as well as caller ID, call blocking, call forwarding, etc. etc.

Now, let's also add "phone number preservation" along with every other little charge of which they can think. We choose to be slaves to a number (and it's a pain to learn a new one each time for convenience) but tend to stick with it out of comfort.

Now, add on surcharges for 911 and for "cross boundary lines" and city taxes and district taxes and county taxes and.... I wonder at times when I see those stakes in the ground noting "Zoning Hearing". For all I know, a state could have been split into about thirty zones and each carrier could be charged for a signal that crosses each.

Gotta love government and its way of squeezing money out of people in a very creative fashion. Of course, they're just following the trend nowaday and going after the larger herd of sheep; the younger cell-phoners. :)

Well, you know what they say

Only two things are certain inlife, death and taxes. (and the death tax)

This is double taxation

If i am not mistaken Your cable or DSL bill already have a tax in it isnt it ? so trying to tax voip call which is carried through the already taxed connection is double taxation if you asked me.

As Reagan said...

"If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Re:As Reagan said...

The original quote in context has a different meaning in my opinion:

Well, anyway, it's wonderful to be having this White House Conference on Small Business again after almost 6 years. Things certainly have changed in the meantime. Back then, government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. [Laughter] Well, with your help, I think we've turned all that around. We cut taxes. We squashed inflation. We brought interest rates down, threw out needless regulations, setting the economy on a growth path that has created somewhere in the neighborhood of 11 million new jobs in under 4 years. Now, most people know that history. What isn't widely enough recognized, however, is the leading role of entrepreneurs and small businesses in our ongoing expansion.

Remarks to State Chairpersons of the National White House Conference on Small Business
August 15, 1986
http://www.reagan.utexas.edu/archives/speeches/198 6/081586e.htm [utexas.edu]

No week pass without something to fuck U.S. People

Nay not a single one. Each week there comes up shit to fuck up american citizens either openly or deceivingly, either by congress, or government bureucracy, or directly by president.

Eh, talk about reaping what you saw. Vote the republicans.

'Family values', 'american values', 'traditions' - any improvement on these so far ?

Lunch Money

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.

$2.12 ?
$1.38 ?

Shit, I've had single long distance phone calls that cost more than that.
$2.12 That's like what, 2 Crispy Chicken Nuggets ?

I've got no problems with forking over a couple Jr. Bacon Cheeseburgers to keep the Long Distance Monkeys off my back.

The biggest threat?

IMO I feel the FCC, or rather the people in control of it currently are the single biggest threat to our democracy.
Media ownership and the parceling out of spectrums seems to be very biased in favor of corps.

Or maybe my tinfoil hat needs tuning.

Universal Service Fund needs to die. Fuck Wyoming

http://blogs.zdnet.com/ip-telephony/?p=1150 [zdnet.com]

Who are these asshole regulators that can put on a tax with no debate ?

They are more worried about F-ING Wyoming.

The USF tax needs to fricking DIE.

Abolish the FCC

I'm serious. Abolish it. I'm a license holder and I still say abolish it. Then re-form it as a bandwidth manager only.

One word: immigration reform died

Your government is going to get its revenue increase even if it can't open the borders. So instead of paying $9000 in rent so 20 million immigrants can join the fun, you'll just pay higher taxes.

Secret conference at FCC headquarters.....

FCC Guy 1: Okay, what can we do to piss off the technologically literate population today?
FCC Guy 2: Hey, I know, what about a broadcast flag!
FCC Guy 1: No, that's too obvious. It'd get struck down in no time. We need something more subtle.
FCC Guy 2: Okay... Let's make it so that sites don't get an equal share of bandwidth unless they pay the ISP's money!
FCC Guy 1: Yes, that's a good idea, but it still might encounter a lot of resistence at first. We need something... Annoying, and restricting, but not enough to make geeks get out of their chairs and write letters to congress demanding that we stop shutting down their freedoms...
FCC Guy 2: I know, let's tax EVERYTHING IN SIGHT!
FCC Guy 1: Brilliant!
*High five*

Guy 1: meeting adjourned. Adgenda for next meeting includes discussion of mandatory two way screens on HDTVs, to "thwart piracy"!

I'm beginning to get reminded of the rediculous taxes the Brits had on the US when it was still just 13 colonies, like the "Stamp tax" (which required a special stamp to be put on anything printed), the "Tea tax", and various other things

Why does it effect the provider?

From the summary: ... urged the agency to postpone its action until it had done a thorough analysis of the economic effect on smaller providers.

Aren't these taxes/fees passed along for the subscriber (customer) to pay? If so, how does that have an "economic effect" on the provider? They're not the ones paying it, their customers are.

Or, why would it effect smaller providers differently than larger ones?

I touched the PSTN today, am I taxed?

Granted, according to TFA the charge proposed is NOT an "AIM/GoogleTalk/etc. tax" as some are implying; it only applies once your data touches the PSTN...but it still seems fuzzy where the line is that makes me part of a "telecommunications service". When an unattended test at my lab faults and sends my phone a midnight SMS via LabView, am I (or our ISP, etc.) supposed to be paying into the FUSF for our half of the wire that leads to that cell carrier?

I;m sick of this

I am so sick and tired of this crap from our gov't. Spying and invading our privacy, fees and taxes left and right, weird obscure agencies doing stuff that the gov't shouldn't even be doing in the first place, subsidising monopolies, wasting tax money to make a show of supporting a bill that is 100% known to be struck down as unconstitutional, and a whole laundry list of so many other things... It's HORRIBLE! I'm sick and tired; I wish I could fire these jokers.

Please people, don't keep electing back the same morans. Don't vote for Party X because it's what your family does. Grow a pair and vote for someone who will fix whats wrong with this country. I hate to turn around and generalise myself (so please do your research before voting one!), but I find most Libertarian cadidates want to fix our country. PLEASE let's let them.

Tax = cheaper than lunch money

come on people... seriously. What can this tax be? 2

We currently switched to Vonage, for their Unlimited 24.99 /month plan. if I pay tax n this, its going to be what? 2 or 3 bucks on top? that is still $25 bucks cheaper than your average phone bill. Even less if you considder how longdi distance is in included in my bill. I think its alright to pay that tax.

Its cheaper than lunch money...

Taxation without Representation

Since when can an EXECUTIVE BRANCH of the US Government agency declare tax rates?

This has to be unconstitutional. Whats next? The DOJ taxing traffic tickets?

This USF stuff is bullshit.

Rural telecommunications; rah-rah-rah!!!

All I know is that this "fee" requires me to dump MY money into paying for telephone service for the boonies, via a telephone company that I hate. How is that capitalistic, again?

You want to live out in the boonies? Pay for your OWN damn wiring. Or use wireless. Or work together with your community.

Why does everyone expect the federal government to pay for their excesses in terms of where they live? Why do people who build houses on sand banks/flood plains expect national flood insurance? Why does New Orleans expect the country to create the worlds largest construction project to protect land that the sea is slowly reclaiming? Why Why Why?

If it doesn't make sense to live where you live, because of financial reasons, don't expect the government to bail you out. Unfortunately, we seem to live in the exact opposite situation; where you receive substantial federal benefits to build your "family" farm out in the middle of Nebraska, 100s of miles from anything, and the government will build your phone lines, and keep the prices of your crops high.

Feels good sucking on the government teat, huh?

encryption

Well - I guess we'll have to encrypt the packets so nobody knows WTF they are. This was probably an oversight when the net was designed anyways.

If we cypher everything but the IP address... this includes the port information - IE - a wrapper to a cyphered port - then once the communication is established (via ssl probably) then we solve all sorts of problems including varying packet delivery based on the packet type (because the carrier wants to gain an unfair competative advantage for say their own video service) as well as other benefits.

So we have to re-think some protocols and reprogram some servers. Ok - I'm a programmer and I'm game!!!

So don't terminate into the PSTN

And just out of curiosity if a bunch of us get together and agree to let VOIP calls use our landlines for our local area codes, would that be about the same as tax evasion now? It seems like most VOIP providers don't have service in Hawaii anyway, which is where most of the family that I want to talk to is located these days. If I could convince my less technical relatives to set up a SIP connection to my local machine, I could just make them an extension on my asterisk box without all the rigamarole of having to deal with the telco at all.

FCC juristiction in Europe?

What will be very interesting is to see how the FCC will apply this charge to European based VOIP companies. Surely the FCC being a US organisation and not having any authority in Europe will prevent them from applying any charges to any European citizens? This is a flagrant way the US is attempting to get the taxing of the internet through the back door and should be stopped immediately.

Oh, yes..

I know everything about the FCC. [youtube.com]

You Voted...

The majority must want more taxes and more restrictions, because they have voted for it. Me, I didn't vote for Bush. I didn't even vote for Gore. I only vote Libertarian. I voted for less taxes, less government, and most importantly, I voted for freedom.

So any of you complaining here about these taxes that also voted for our current government should have nothing to complain about.