TELECOM Digest OnLine - Sorted: Municipal and State Governments to VoIP Industry: "Deploy VoIP"

Municipal and State Governments to VoIP Industry: "Deploy VoIP"

Lisa Minter (
Thu, 23 Dec 2004 13:24:41 -0500

December 23, 2004

Municipal and State Governments to VoIP Industry: "Deploy VoIP ... but
Give Us All your Money" -- Zen Koan or Catch 22?

A Wall Street Journal editorial yesterday (12/22) shined the spotlight
on those politicians and policymakers who have been sending mixed
messages lately to the VoIP industry. These politicians have been
saying on the one hand that consumers should be allowed to avail
themselves of the benefits of IP technology, and, at the same time,
they have been threatening to extract usurious fees from VoIP service
providers. These mixed signals have made it difficult for us would-be
innovators and entrepreneurs to know whether or not to deliver
IP-based technologies and services to American consumers. Every
legislator, governor, and regulator allegedly wants to promote, and
allow its constituents to benefit from, new IP-based technologies and
services. At the same time, many politicians see VoIP as an easy
revenue generator and have blood in their eye for the nascent VoIP

Recent FCC and Congressional action indicates a general desire to
ensure that the VoIP innovators may continue to bring new technologies
and services to consumers with some assurance that government will not
stifle its growth through unnecessary fees, taxes, or administrative
hassles. Most recently, the FCC indicated that VoIP services must not
be subjected to 50 state and countless local rules that would make it
impossible for any would-be VoIP provider to deploy a national or
global product.

Within the past two weeks, however, we have heard rumblings from both
state and local authorities that they intend to extract as much blood
as possible from the nascent industry. The WSJ properly noted recent
efforts by the National Governors Association and by some in Congress
who would attempt to impose taxes upwards of 20% on VoIP services.

The WSJ editorial did not take note of similar efforts by
municipalities, such as Santa Monica, to impose a utility use tax on
VoIP services. At least the city of Santa Monica had the nerve to
confront the industry directly without having to hide behind a mob of

Unlike Santa Monica, members of the National Governors Association are
attempting to shield themselves within the mob. No individual governor
could be accused of thwarting VoIP if all the other governors endorse
a nationwide effort. I guess no one wants to be the only governor
imposing usurious fees on new IP-based technologies and
services. Instead, the governors have joined forces in the hope that
if everyone imposes similar fees, they do not individually take the
heat for being the only tax-imposing luddite driving away the VoIP

Full story at:

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