In a ruling published in mid-November, the FCC opened the doors for further deregulation of Internet phone services in ways that are bound to have implications galore for anybody interested in marrying phone service to an Internet connection. The agency ruled that telephony is just like any other IP application and can therefore not be taxed, as California cities Burbank and El Monte recently sought to do. Though the tax is similar to what ordinary POTS telephone service providers already pay, but such taxes do not apply to calls made over the Internet that don't impinge on the conventional phone system. Understandably, this has states, municipalities, and other legal entities that currently collect such taxes worried because the ruling means that their revenue bases are doomed to shrink as a consequence. The FCC ruling seems to weigh heavily against their future revenue from communications, as more users continue the switch to IP telephony.
On the other side of this relationship, Internet carriers and service providers are pleased not just because of the savings, but also because of the potential difficulty involved in metering and monitoring Internet communications to determine what should and shouldn't be taxed. The FCC's decision means that the development effort necessary to support such activity (necessary for passing charges along to users, should they be required to be paid) is not going to have to occur.
Among other technical possibilities, this ruling
- The ability for cellphones to tap into wireless hotspots to make calls wherever the caller might be located (Siemens already has an adapter that extends IP calling capability to their phones loaded with Skype Net phone software, for example).
- Dual-capability phones (cellular or wireless) that can access both IP and conventional POTS phone networks. Among others, NexTel is already hard at work building handsets to deliver this kind of access.
- Tighter integration among voicemail, e-mail, calendaring and scheduling, contact databases, and other natural extensions to the kind of information that telephone users might need to access to help them make more effective use of their phones. Countless vendors from regional Bell companies to mainline telephony giants like Avaya and Nortel to relative newcomers like Cisco are all working like mad to come up with "killer apps" for this area, widely perceived to be a sweet spot for technology innovation.
Although this will cause many taxing bodies to feel a pinch sooner or later, it also opens the doors for significant inventions, technologies, and applications. I can't help but feel that all of us will benefit from this in the long run!
Ed Tittel is a regular contributor to numerous TechTarget Web sites, and the author of over 100 books on a wide range of computing subjects from markup languages to information security. He's also a contributing editor for Certification Magazine, and edits Que Publising's Exam Cram 2 and Training Guide series of cert prep books. E-mail Ed at email@example.com.
This was first published in December 2004