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FCC Chair Martin suggests VoIP contribute to Universal Fund

Fri, 06/02/2006 - 8:25am
Brian Santo, CED

FCC Chairman Kevin Martin has floated a suggestion that VoIP service providers should contribute to the federal Universal Service Fund. The fund is used to subsidize phone service for more than 7 million low-income consumers, to offer reduced telecommunications and Internet rates to rural health-care providers, and to subsidize those services for schools and libraries.

The $7.3 billion Universal Fund was hit with a $350 million shortfall after the FCC reclassified DSL as a telecommunications service, and the Commission is looking for ways to compensate.

The proposal could come up for a vote at the FCC's next open meeting, on June 15. If approved by the FCC Commissioners, consumers would likely see their mobile and Internet telephone bills rise.

The fund is financed through a 10.9 percent contribution factor that companies pay on revenue from interstate and international telephone calls. VoIP providers could have up to two-thirds of their revenue become subject to that levy.

Wireless companies are assessed on up to 28.5 percent of their customer revenue. Under Martin's proposal, this cap could be raised to 37.1 percent.

All estimates are apparently subject to revision.

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