CCIA Challenges FCC’s Overreaching on Taxing VoIP Services

File Under: 2006

Sep 13, 2006

FOR IMMEDIATE RELEASE

WASHINGTON, D.C. —The Computer & Communications Industry Association (CCIA) challenged the recent FCC order that for the first time imposed Universal Service fees on Voice over Internet Protocol ("VoIP") service. CCIA filed a Petition for Review with the D.C. Circuit Court of Appeals questioning the FCC’s statutory authority to impose such a tax o n an Internet-based application.

This decision placing classic telephone regulation o n Internet-based services contradicts established precedent and is fundamentally inconsistent with the 'hands off the Internet' position taken by the U.S. Congress.

"The FCC's decision to impose USF payment obligations o n VoIP providers is an ill-advised step toward regulating the Internet," said Ed Black, President and CEO of CCIA. "This order imposes the burden of supporting an outdated Universal Service program that subsidizes 19th Century technology o n an innovative new technology still in its infancy. Common sense and sound public policy tells us that this logic is backwards."

CCIA recognizes that the shrinking revenue base of the Universal Service Fund threatens its long-term stability. However, imposing a USF tax o n VoIP offerings as a stopgap measure not o nly takes pressure off the FCC to initiate true Universal Service reform, but also unnecessarily threatens the burgeoning VoIP market. The FCC should not be looking to regulate and tax VoIP. Instead, it should be doing everything in its power to encourage this exciting new technology, which has the potential to bring dynamic competition into a relatively stagnant market.

Not o nly did the FCC exceed its statutory authority with its decision, it threatened the viability of a new technology. Internet applications, such as VoIP platforms, have thrived because they have not been subjected to the same burdensome regulation and taxes as telecommunications services. In this matter, CCIA feels obligated given its history of fighting for competition and innovation in high-tech markets to challenge this order and fight o n behalf of emerging VoIP companies everywhere.

Contact: Will Rodger, 202-783-0070 ext. 105