Speaking of Cellphones

[Frenchie]

From AJC

FCC increases fees on Internet, cell calls

By DAVID HO, MARILYN GEEWAX
The Atlanta Journal-Constitution

Published on: 06/22/06

WASHINGTON — Wireless and Internet-based phone subscribers will likely face higher bills after federal regulators voted Wednesday to change how those industries help fund communications services for rural areas and the poor.

The Federal Communications Commission approved a measure requiring Internet phone companies such as Vonage Holdings Corp. to contribute for the first time to the Universal Service Fund. Wireless carriers also would have to pay more than they do now, the FCC said.

The $7 billion fund subsidizes telephone service in low-income and high-cost areas and helps connect schools and libraries to the Internet. Traditional phone companies and wireless carriers typically pass the charge on to consumers as a line item on monthly bills.

FCC officials refused to estimate what the change would do to consumers' bills. But telecom experts predicted that Internet phone customers who now pay $25 a month will have to pay an extra dollar or two. For cellphone users, the increase should be smaller.

The service fund has faced a looming shortfall after the FCC last year exempted digital subscriber line, or DSL, services that deliver high-speed Internet access over traditional phone lines. That added to pressure on a fund already experiencing increased spending and shrinking revenue.

Telecommunications companies currently must pay 10.9 percent of their revenue from long-distance and international calls into the fund. That proportion is adjusted quarterly and will soon drop to 10.5 percent.

Cellphone companies, which offer plans that blur local and long-distance calling, have had only part of their revenue subject to these contribution requirements.

On Wednesday, the FCC raised the maximum amount of wireless revenue that is subject to the tax to 37.1 percent from 28.5 percent, meaning the wireless companies will be contributing just over 4 percent of their revenue to the fund.

For Internet-based calling, the FCC set the portion at 64.9 percent, meaning those companies will be contributing just over 7 percent of their revenue. That will affect the young industry that uses technology called Voice over Internet Protocol, or VoIP, to compete against traditional phone companies.