Death and Taxes

If you ever needed proof that the Telecom industry is using their considerable power and wealth to make the people's government into a tool for executing their own anti-competitive strategies, look no further than the recent ruling on USF (Universal Service Fund). If the telecom industry gets its way, we'll have a whole new saying about death and taxes -- the only thing sure about government control by monopolist telecoms is death by taxes.

Not such a bad idea in 1934 when the government determined that a need existed to provide every person (no matter how remote) in our great country with access to the phone system and that many such rural areas could not be profitably served. Since AT&T was a monopoly telecom provider, the government used a tax on AT&T to nudge them to do what was right for the country's citizens - provide universal access to the telephone system, regardless of how unprofitable a given rural phone line might have been to set up and operate.

Fast forward 72 years -- what is USF today? A tool for the monopolies to use to crush competitors - first cable companies and now VoIP. Jeff Pulver has a very good analysis on his blog in which he summarizes in part:

• Is not limited to calls that touch the PSTN – includes IP to IP calls (pg 20)
• circumvents the Vonage decision to allow state regulation of VoIP, if you report actual revenues (pg 29)
• requires pre-approval of traffic studies – but not for wireless providers because pre-approval would be disruptive to wireless, but not VoIP (pg 30)
• requires double payments of USF fees for 2 quarters – waiving the “carrier’s carrier” rule so that wholesale providers also have to pay USF for the same service (pg 30)
• Includes new VoIP registration requirement with the FCC
• does not include a transition period
• indicates a desire to expand the definition of Interconnected VoIP in the future (pg 20)
• includes international traffic
• ignores Small Business Administration arguments (pg 121)
• Does not discuss this decision’s impact on VoIP providers, but finds it will have minimal impact on LECs (pg 13)
• requires VoIP providers to pay into USF at the highest rate of any service
• buried deep in footnote 209, relieves DSL of USF obligations

The good news is that VoIP can route around this damage - first, disconnect from the telcos. They don't want our business. Fine. Let's all move more quickly to IP -> IP connectivity for our calls. Second, to the extent that you have to make a call into a Telco, connect via another country. Canada is 5 cents a minute to the US. France has extra bandwidth into the US available for pennies per minute in bulk. Or there is another option. Like Ebay's Skype, give away the minutes for free (and I guess, make your money somewhere else). The government can only tax you if you are making money...

Meanwhile, let's remind congress and the FCC that the SERVE THE PEOPLE, not telecommunications companies.

Happy 4th of July.