Tuesday, June 20, 2006

Vonage Foresees Minimal Cost Increase for USF Funding

Vonage foresees only slightly higher bills for its VoIP due to the FCC's action to support the Universal Service Fund (USF). This is because the USF-related cost increase will be offset by the recent elimination of Federal Excise Tax (FET) from VoIP services. Vonage is assessing which method of contribution will be most beneficial for its customers.

"Vonage fully supports its obligations to government programs. Last month the Treasury advised us to cease collecting FET, to the benefit of customers, and now we must begin to collect USF tax, balancing the scales," said Mike Snyder, CEO, Vonage Holdings Corp. "Now that VoIP customers will be contributing directly to the fund, we hope as a result of this interim rule, VoIP companies will now be able to utilize universal service funds enabling Vonage and the industry as a whole to bring new technologies like ours to rural America."http://www.vonage.com

  • In May 2006, the U.S. Treasury decided to end collection of the long distance telephone excise tax and the Internal Revenue Service (IRS) will issue refunds of tax on long-distance service for the past three years.
    The tax was originally imposed in 1898 as a "luxury" tax on wealthy Americans who owned telephones and was established to help fund the Spanish-American War.