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Saturday, April 8, 2006

'Tis the Season of Surcharges & Fees

It's tax season time and it's only appropriate to discuss all things taxes, aka "surcharges" in our industry. I've always believed the incumbents with or without VOIP have a huge pricing power over any emerging technology that mimics what they offer.

Spunky voice providers like Vonage and SunRocket can offer cut-throat prices (aka spend their venture dollars on you and me), but they will never be able to displace the incumbents for basic residential service. Besides, take a look at my all-i-want-is-9-1-1 phone bill below and decide for yourself if at&t or the US Goverment is the competition in my area!

The odds are against them especially when Uncle Sam and his 50 nephews and nieces grab their share of surcharges and fees from you every month. Of course, you cannot call them taxes :-)

And I don't actually use my phone and have the service only for E-9-1-1.

I think the only way to compete is to fight on the access side and the events that are transpiring in the muni networks is the way to go. The fight is still in the pipes.

Voice, after all, is just another application on the network.

1 comment:

  1. Apparently one portion of the tax, the federal excise tax for long distance, is set to vanish and $60B refunded if the gov't loses the third case in court.

    Interestingly, the WSJ writes,

    The law -- originally enacted to help pay the costs of the Spanish-American War -- taxes telecom services based on both the duration of a call and the distance it travels. But the changing nature of technology now lets phone companies offer flat rate per minute or monthly plans. The government, however, has continued to assess the tax under the old services, sparking widespread protest.