July 23, 2004

Senate panel embraces state VoIP taxes - News - ZDNet

Now the Senate tinkers with the rules around VoIP. Never let it be said that a good thing can evolve on its own merits without unnecessary government regulation and taxes (Seems the halcyon days of the Internet are coming to an end!). There are some fees on VoIP and other telecom services that may make sense, such as E911. For public safety reasons, emergency services should continue to be supported by customers of companies providing voice telecommunications services.

I don't support Lifeline service surcharges on VoIP services. Although Lifeline is a worthy goal, as a welfare subsidy it should be paid from state general funds competing for funding with all the other welfare mechanisms, not from support of any one class (landline POTS) of telephone customers.

The argument has to be: If landline customers pay a Lifeline tax/fee/surcharge, then cell phone customers, VoIP customers, Wi-Fi customers, and customers of any other technology used for voice services should also pay it. That leads to an unworkable situation from a regulatory, billing and collections perspective because of the highly competitive environment. Better to exempt all telecom services from such a charge. Now's the time to have this debate before the politicos listen to the regulators and enact bad law. The logic used (POTS monopolies' customers should pay it) when Lifeline was imposed no longer holds.

In Vermont, the lawmakers should muster the courage to repeal the tax on business telecom services. This is a 'penalty' tax that does not encourage telecom growth, a necessary underpinning for a healthy economy.

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