USF tax and long-distance

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Tom Keating
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USF tax and long-distance

A controversial proposal by Federal Communications Commission (FCC) Chairman Kevin Martin plans to hike the Universal Service Fund (USF) charges for phone users who make few or no long-distance calls. But what is long-distance any more? If you're a broadband VoIP user using Vonage, Packet8, etc. technically nothing is long-distance in the traditional sense of the word. Actually, a VoIP call from a Vonage user in Los Angeles to another user in Los Angeles travels a "long distance" since the IP packets have to travel from Los Angeles to Vonage HQ in New Jersey where an outbound call is made back to L.A. Even if Vonage has "local" gateways in California of their own or through an ITSP (such as Level3), the IP packets can still be routed across routers located in different states before finally terminating on the PSTN -- technically making it an intrastate long-distance IP call.

Of course, this new USF proposal is targetted at traditional landline users and not VoIP, but I'm sure some new USF tax on VoIP proposal won't be far behind. :@

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