At the Democratic National Convention this week, Vonage in conjunction with the Distilled Spirits Council of the U.S., threw a party at Anthem restaurant, luring politicians and others to learn about VoIP and why it shouldnt be regulated by the states but instead the federal government. (To find out more about this story see the July 27th WSJ story Vying for Attention). Vonage has been doing a great job fighting in the senate to keep our government from taxing VoIP like POTs lines. This is exactly what the industry as a whole needs to do and Vonage should be commended for their efforts. The government has taxed telecom to death via the Universal Service Fund and various other fees. Many politicians in rural areas have gotten used to receiving a windfall from telecom and see VoIP as eroding the telecom cash cow they are used to milking. In the end, the distinction between VoIP, e-mail and voice chat (IM where you can speak instead of type) is so minute that I have trouble understanding how the government will be able to explain to the public that VoIP is taxed while voice chat isnt and e-mail isnt. I cant fathom them taxing all three. The genie is out of the bottle at this point and we all know that IP to IP calls dont even need a service provider if you have endpoints that support VoIP. If the government gets too crazy about taxing and regulating VoIP, people will try even harder to find ways of communicating without service providers. Another option will be service providers providing voice chat over IP services similar to what Nextel does for cell phones. Will the government tax this as well? How will you differentiate voice chat from chat? From my perspective, the government trying to tax VoIP will be like the music industry trying to stop illegal sharing of music on the internet. You shot down Napster and then an army of peer-to-peer developers develop software to get around what you just shut down. The concern in all this is that the government will regulate VoIP service providers to death, leaving equipment providers in a apposition to deliver products that dont need service providers. Then who do you tax? As I have said many times before, it will have to be broadband that is taxed. Taxing every service that runs across a broadband network is lunacy. Please click here if you want to Join The Fight Against VoIP Regulation.