FCC to Get Cut of Cable VoIP
By Ted Hearn -- Multichannel News, 8/12/2007 8:00:00 PM
Washington — Cable operators will need to hand over a portion of their voice-over-Internet Protocol revenue to the federal government to help fund the Federal Communications Commission’s annual budget, the agency ruled last Monday.
The National Cable & Telecommunications Association didn’t oppose the payment of VoIP regulatory fees, especially if the agency based cable VoIP contributions on a per-phone-number basis.
The FCC, however, opted for a revenue-based formula, which doesn’t easily translate into a per-phone-number equivalent. That’s because cable operators in many cases package VoIP service in a bundle with video and data services at a single price.
To derive the actual amount owed under the FCC’s revenue-based formula, cable telephony providers will need to allocate a portion of their triple-play revenue solely to VoIP — something cable multiple-system operators already do to calculate franchise fees owed to local governments for the provision of traditional video services.
For the 2007 fiscal year, which ends Sept. 30, the FCC needs to collect $290.2 million to fund nearly 100% of its operations.
Cable, which has to pay $48.3 million of that total, may collect 75 cents from each video subscriber to do so. That’s down from 79 cents from the prior fiscal year, when the FCC had to raise $298.7 million in regulatory fees.
Mandating that cable VoIP pay FCC fees was another instance of the agency under chairman Kevin Martin adding to the regulatory burdens of a nascent service fighting for market share against phone incumbents with a century of monopoly power.
In 2006, the FCC voted to required cable VoIP providers to contribute to the universal service fund, an industry tax that, among other things, subsidizes phone service in parts of the country that are expensive to serve. Under the FCC’s formula, about 7% of cable VoIP revenue is dedicated to the USF program.
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