VoIP Bills Set to Increase

FCC votes to force USF contributions from Internet telephone services.
Posted June 22, 2006

Roy Mark

WASHINGTON -- Note to Internet telephone users: Your monthly bill is about to go up.

In a long anticipated move, the Federal Communications Commission (FCC) ruled Wednesday Voice over IP (define) services must contribute a portion of their revenues to the Universal Service Fund (USF).

If VoIP providers follow the lead of local and long distance telephone companies, wireless providers, paging firms and pay phone companies -- who already pay into the USF -- the costs will be passed on to consumers.

The ruling only applies to VoIP services that interconnect with the public switched telephone network (PSTN).

"Like public safety goals, universal service obligations transcend new technologies and cannot be compromised," FCC Chairman Kevin Martin said.

The USF subsidizes phone service in under-served and rural areas. Through the E-rate fund, the USF also subsidizes Internet connections in schools and libraries.

According to Medley Global Advisors, the FCC order is likely to add approximately $1.30 a month to each VoIP subscriber's bill. An FCC spokesman said VoIP consumers are likely to begin seeing the increase on their bills as early as September.

This article was first published on InternetNews.com. To read the full article, click here.

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