Cable USF Payments May Soar

CABLE USF PAYMENTS MAY SOAR
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Cable operators that offer voice-over-Internet-protocol service could see their federal phone-subsidy payments more than double under a proposal supported by Federal Communications Commission Chairman Kevin Martin, according to cable and other sources familiar with the plan. Chairman Martin’s plan is designed to shore up the universal-service fund (USF) as a result of changes in the voice-communications market and the agency’s decision last year to exempt digital-subscriber-line revenue from going toward USF contributions. The DSL exemption alone is expected to drain $350 million annually from the $6.5 billion program. The FCC could vote on Martin’s plan at its June 15 meeting, but an agency spokesman would not confirm any proposed changes to the USF. Martin’s plan is considered an interim step. In an approach supported by the cable industry, he is in favor of adopting what’s called a numbers-based approach, which would involve charging a monthly fee on each working phone number in order to collect the $6.5 billion needed. A cable-industry source said a numbers-based approach would cost a cable VoIP customer about $1 per month, compared with $2.83 under Martin’s interim plan. USF fees may be passed along to consumers. Under Martin’s plan, the wireless formula is to rise to 37.1%. But VoIP providers are to assume that 65% of revenue is interstate, forcing Time Warner to increase its USF payments. Wireless carriers will end up paying 4% of total revenue and cable operators 7% of their VoIP revenue into the USF.
http://www.multichannel.com/article/CA6339867.html?display=Breaking+News

* Bigger bills loom for users of wireless and Net phones
http://www.usatoday.com/printedition/money/20060601/voip01.art.htm