Telecom Industry Opposes State Fees on Internet Telephony

AT&T, Verizon, Vonage and other leading telecommunication companies sent a letter to the Federal Communications Commission recently urging the FCC not to subject Internet telephony to state fees for the Universal Service Fund, a program that subsidizes telecommunications costs in rural areas.

States are preempted from regulating Internet telephony, also known as voice over Internet protocol (VoIP), the companies say, citing a 2004 FCC order. Nebraska and Kansas have petitioned the FCC for a ruling that would allow states to collect fees on VoIP services for the Universal Service Fund. According to sources familiar with the situation, the FCC is considering a declaratory ruling that would accomplish as much. The Telecom industry letter echoes sentiments expressed earlier this week by House Commerce Committee ranking member Joe Barton (R-TX) and the ranking member on the panel's Communications subcommittee, Cliff Stearns (R-FL). According to the National Association of Regulatory Utility Commissioners, the law has already made clear that Internet telephony services are obliged to contribute to state Universal Service Funds. "There is no dispute on the law," said Brad Ramsay, the association's general counsel.