VoIP Industry Newsletter: Focus on Topics in SIP Trunking

Jan 2009

FCC May Redefine VoIP Landscape

In the waning days of the Bush administration, the Federal Communications Commission had the opportunity to make a number of significant regulatory decisions, any of which could have a significant impact on the Voice over IP community.

The question on the table is one of clarity and whether the FCC will at last put forth regulations defining certain key terms and relationships within the VoIP world. With many smaller providers having established themselves and larger carriers beginning to delve into IP, some observers say the time is ripe for the FCC to lay out some basic conventions.

Questions about VoIP are wrapped up within a sweeping overhaul agenda known as comprehensive intercarrier compensation reform-an effort to review rules governing the money that changes hands when carriers originate, transport, or terminate traffic across networks. This effort has drawn attention throughout the telecommunications world.

Then there is the financial picture and the matter of intercarrier compensation. The VoIP world has been waiting for some guidance as to whether IP-to-TDM (or TDM-to-IP) calls are to be treated as traditional TDM calls in terms of charges and reciprocal compensation.

--Enterprise VoIP Planet

Taxes, Taxes, Taxes

Sacramento, Calif., initiated a tax on VoIP communications today, as "Measure O," the "Utility User Tax Reduction and Fairness Measure" takes effect. The measure drops the overall tax rate on communication services from 7.5 to 7 percent, but the tax now includes VoIP calls, text messages and voice features like call waiting and caller ID as taxable items. Internet access won't be taxed, but mobile data plans will. Telecommunications companies have until March 1 to begin assessing the taxes on customers' bills.

Measure O passed on November 4, with the stated aim of "ensuring that communications users are treated uniformly without regard to the technology used." Sacramento will receive an estimated $12 million annually from the increased tax revenue.

A VoIP customer in Sacramento averaging $20 per month in charges will spend an additional $16 per year for phone service, which isn't a tremendous increase. But with economic times tight, regulations like Measure O eat away at vanilla VoIP's value proposition. If similar measures pass in other cities, VoIP providers wouldn't lose any direct revenue since the actual service price stays constant. But VoIP taxes might slow adoption and there is always the annoying accounting overhead when different cities set different rates and demanded compliance.

--FierceVoIP


  Next>>