/weblog/universal-service-fund

If It Looks Like a Telephone Company...

Thursday, November 19, 2009

In the United States today, the US Congress is holding hearings to rework some elements of the Universal Service Fund (USF) act. The changes proposed would likely effect Voice over IP providers. Members of Congress are debating on whether to include a requirement that VoIP providers must contribute to the USF in states where their customers reside.

The USF is designed to subsidize phone service to rural communities, the poor, schools and libraries. Currently, legacy telcos and VoIP providers pay part of their interstate and international revenues into the fund. While the FCC does get some funds from VoIP companies, up until now rulings have impaired a state's ability to collect funds from companies providing communication services within its borders.

From a prepared statement, Oregon Public Utility Commissioner Ray Baum said this:

"The FCC has the authority now to eliminate the need for the new definition of 'communications service provider' by making a long-overdue final classification of the status of facilities-based and so-called nomadic VoIP providers."

At some point in the growth of an industry, VoIP service is this instance, the government is going to want to get a piece of the action. Not too long ago, Vonage won an exemption from paying USF fees because it claimed to be an "information service". Ironic as Vonage shamelessly markets itself as a telephone company.

I think the law makers in the United States are getting it right when they attempt to keep pace with today's technology. Now if they could find some financial incentive to address software patents...