Changes in the VoIP Landscape

Time moves on, and the catalysts around markets change. Today's post is about two such subtle changes that will have an ongoing effect on the marketplace.

RBOC's get more agressive: As you may recall, we have always recommened keeping a regular line as a backup, and our policy was to use the most basic line for this purpose. Yesterday we were contacted our local Telco, BellSouth, telling us of a new service offering that could "save us money". BellSouth is now offering a much more limited version of their feature-rich but expensive"Complete Choice" package with the most ordered options, including Caller ID, packaged in. The total cost for us was less than the cost we are currently paying for the most basic service, so it is a no-brainer. Of course, they would also like to add their new $0.05/minute long distance service, which begins to make them a more compelling competitor!

New taxes levied: In June, the FCC decided to require all interconnected VoIP services that connect to the public-switched telephone network to contribute to the Federal Universal Service Fund (USF). This $7.3 billion fund, does have a worthy purpose of subsidizing telephone service in rural and low-income areas, as well as providing discounted Internet and phone service to schools and libraries. But the VoIP companies are signalling that they will begin collecting for this additional tax soon. Part of the expense is mitigated by the recent demise of the Federal Excise Tax (FET), which was eliminated in May.

More information from the on the FCC Universal Service Fund ruling can be downloaded from the FCC website here.