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Johanne Torres[July 26, 2004]

VoIP Tax 2: Adventures of the Pay-for-all Fees


And yet, the VoIP tax saga continues� Let�s recap! So, Internet phones came about and took IM to the next level, there was a microphone and speakers that made us magically, have real conversations! Then, our computers were calling regular phones and we started, kind of, talking for free. Then came VoIP providers, created calling plans, cool VoIP phones, life was neat, everyone was happy. Oh yeah, well, while all of this was happening, there was Uncle Sam, watching our every move, there, quietly.  He then sent his little allies, Senator-R and Senator-D, to inform everyone in the cyber galaxy that it was about time to shell out some moola, and pay up some taxes.  Did I skip anything?

While we netizens try to merge (or even replace) traditional communication services with great new technology, the government seems to seek every possible way of �regulating,� or as we more properly call it, �cashing-in� these increasingly popular communication platforms. Throughout history, taxes have been supporting the development of �new� technologies. If you still have a land line telephone connection, you are probably paying tax to support the rural areas where this service is not yet available. This starts off the never-ending chain reaction caused when traditional communication services start surfing the new technological wave. Is seems that the same type of tax will eventually be applied to calls made using Voice over IP (VoIP) (define - news - alert) technology, in order to support legacy telephone wiring, partially used when placing these phone calls. But, will the ball stop there?

We have to remember that VoIP takes place in a peer-to-peer-like environment, just as other communication platforms are. These platforms, that we use for free, like instant messaging, chat, and inevitably email. Is the government planning to grab and classify those as taxable services as well?

Taxing of VoIP services has been a very hot topic during these last few weeks. Initiatives of regulating these services have been on a few state government officials� top-tackling issue list during this election jumble. There have been notable baby-step attempts towards VoIP taxed regulation.

The frenzy began when companies were relieved to know that a bill was set off by a New Hampshire senator that would keep state legislature from imposing local taxes to VoIP providers. It was not too long after this decision raised eyebrows in the Senate; everyone found reasons galore to blot the bill. Come the re-writing and amends, North Dakota senator Byron Dorgan defined two ways that tax could be collected on a state level. Charges would support the notorious Universal Fund (which takes care of expanding affordable legacy phone services to rural America and even providing schoolchildren in these areas with Internet services) and would also contribute to the usage of the legacy wires. Added to that, the multifunctional fees would also serve the Enhanced 911, or �E911,� (define - news - alert)  efforts, and whatever the police and investigative forces spend on the wiretapping of phone calls fiasco. Makes us consumers wonder what astronomical fee will end up hitting our cyber pockets�and VoIP service providers, for that matter, wonder how much time do they have to pack their bags and work from a remote corner in the world.

Johanne Torres is the Assistant Editor for TMCnet.com and Internet Telephony magazine. Previously, she was the Assistant Editor for EContent magazine in Connecticut. She can be reached by e-mail at jtorres@tmcnet.com.

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