I just read Jeff Pulver’s blog about the recent FCC Order (FCC-06-94A1) requiring all “interconnected” VoIP service providers to pay Universal Service Fund fees. I have yet to read the 155 page Order itself, but Jeff’s synopsis is quite alarming.

The Universal Service Fund (USF) was created by the FCC to promote telecommunication services in rural and low-income areas. When the USF was first put into place, only traditional long distance companies were required to contribute to the fund. In 1996, Congress passed a law that required all local telephone companies, wireless telephone companies, paging companies, and payphone providers who provide state to state long distance calling services to contribute to the fund as well. The FCC’s recent action now extends it to VoIP service providers too.

Although most industry watchers (myself included) assumed that it was just a matter of time before the USF fee was also applied to VoIP calls, the FCC Order appears to go much further than anyone anticipated – applying to revenue from PC-to-PC calls, and other transmissions that do not touch the PSTN. Conceivably, it would apply even in cases where both parties to a call are not on US soil (for example, on calls between two US VoIP subscribers travelling outside the country).

If you are, or plan to be, a VoIP service provider it would behoove you to read the Order to find out exactly how you are affected. Much to my dismay (in my previous life as a lawyer, much of my time was spent slogging through this stuff), that’s exactly what I am about to do.