Chicago Residents Get Stars, Stripes and Taxes for Independence Day

Hosted NAS Service image

Chicago’s 9% “Cloud Tax” became effective July 1 for all city of Chicago consumers, including businesses If you’re like most people, you probably look forward to the July 4th holiday to celebrate and reconnect with family, friends, and close business associates. Maybe you had planned on enjoying the holiday with a streaming movie service. Maybe … Read more

The VoIP Market’s Gotten a Lot Tougher for the Little Guy (Pt 2)

In many ways, VoIP regulations and taxes favor larger corporations, in both financial and structural ways.

The Price Competition Factor- Who Pays the Bill?

As VoIP services find themselves increasingly taxed at the State and Federal level, there’s a big question of who, exactly, will pay for these taxes, and how these tax increases will affect competition between large providers and small providers.

Generally speaking, large providers almost always have a price advantage over small providers. That isn’t to say large providers offer a greater value than small providers, but it is to say their economies of scale almost always ensure they can sell their services for less than their smaller competition.

This gives larger providers a distinct market advantage over smaller providers as taxes on VoIP increase. Larger providers are going to be better able to pass these taxes directly on to their customers instead of paying them out of pocket. Often they’ll be able to do so while still offering cheaper services than smaller providers.

Smaller providers face a bigger question as taxes rise- should they make their customers pay these taxes, raising their rates? Or should they pay these taxes themselves, sacrificing some of their already slim margins in order to continue to serve their customers at the same price point those customers are accustomed to?

Once again- let’s reiterate that we aren’t talking about value here, that we’re only talking about price. When it comes to price, larger providers almost always have leverage over smaller providers, which means these increased tax burdens have hurt smaller providers far more than their larger competition.

Read moreThe VoIP Market’s Gotten a Lot Tougher for the Little Guy (Pt 2)

The VoIP Market’s Gotten a Lot Tougher for the Little Guy (Pt 1)

The government has never really known what to do with VoIP.

On the one hand, VoIP is a telephony service, and as such some people argue it should be regulated and taxed in the same vein as other telephony services (such as traditional PTSN networks).

On the other hand, VoIP is an online service, a platform that isn’t so different from any other online application you might utilize, and one that should be open to new, small service providers. Seen from this angle, the notion of taxing and regulating VoIP has been a thorny issue, to say the least.

Over the years, as VoIP has increased and improved the services it’s offered and gradually transformed further and further into a full-service telephony platform, VoIP has seen increasing regulatory and tax burdens placed upon it. These burdens have dramatically changed the VoIP landscape- especially for small VoIP providers and organizations looking to become VoIP providers.

Read moreThe VoIP Market’s Gotten a Lot Tougher for the Little Guy (Pt 1)

Has non-Interconnected VoIP Been Legally Defined as a “Communications Technology”?

There’s been a debate since the early days of non-interconnected VoIP over whether the technology counted as a bit of communications technology or an information technology. This sounds like a matter of semantics but legally speaking there’s a big difference between the two. Simply put information technology and communications technology are regulated differently and a whole lot of people fear non-interconnected VoIP is going to be named a communications technology and will start to face the same sort of regulation as the incumbent telecom players.

But here’s the thing- non-interconnected VoIP has pretty much already been named a communications technology, making it subject to a whole bunch of regulations that information technology finds itself immune from, some which non-interconnected VoIP has already begun to adopt.

Read moreHas non-Interconnected VoIP Been Legally Defined as a “Communications Technology”?

Is Regulatory Creep Inevitable for VoIP?

The threat of regulation, to one degree or another, often seems inevitable for the VoIP market. This wasn’t always the case. In the very early days of VoIP it seemed like the communications technology would remain independent of governmental interference, largely due to its net-based nature. Yet as VoIP use grew over the years, and as it became increasingly clear how big a player VoIP was going to be in the larger telecom market, the notion of regulation began to seem more and more inevitable and, to some people, more and more necessary to ensure the normal, everyday telecommunications technologies of the future continue provide reliable service and access to emergency services, to name just a few avenues of concern for VoIP users and potential regulators.

Read moreIs Regulatory Creep Inevitable for VoIP?

Just How Big Will VoIP Market Grow? (Part 2)

Continued from “Just How Big Will VoIP Market Grow (Part 1)

Falling price point primed to match consumer expectations isn’t the only reason Point Topic believes the global VoIP market is due to hit 40 billion dollars in annual revenue by the year 2015. After all, ideas of substitution commodities and ideal price points are a little academic, a little theoretical, and they don’t quite bring the hard-nosed proof that the global VoIP market is set for some big, big changes over the next couple of years. For that sort of proof, Point Topic looked at an area they considered an important “test bed” for rolling out the technology.

Read moreJust How Big Will VoIP Market Grow? (Part 2)

Why is Skype Launching Free Wi-Fi in Britain?

There’s no question right now whether VoIP is eventually going to become the default mode of telephony communication throughout the world, for both domestic and international communications. Instead, the real question is how VoIP will pursue its path to world dominance. Most likely we’re going to see a mix of different implementation methods. The major mobile carriers will likely switch all of their services, including telephone calls, under a single data plan, a shift that will effectively create mass adoption of VoIP regardless of whether mobile users ever become aware of the transition. But despite the power they have to make VoIP the standard for mobile communications overnight it’s increasingly clear the major mobile carriers aren’t the only players in the access or IP transport business with their eyes on new revenue streams, a point driven home by Skype’s recent initiative to provide free wireless across Britain.

Read moreWhy is Skype Launching Free Wi-Fi in Britain?

Will Telephony Regulators Lose Their Teeth With VoIP Adoption?

There’s an interesting bill finding it’s way through California’s legal system these days. The bill is known as SB 1161 and it has sailed through California’s legislature and now sits on the desk of the state’s Governor, who is expected to pass the bill and put its far-ranging changes to the way the country’s biggest state regulates its telecom industries. Opponents of the bill say it will remove all the power telephony regulators currently have and, at the same moment, remove many of the protections consumers currently enjoy. Proponents of the bill, primarily the bill’s sponsor AT&T say the bill’s big changes will ensure “internet freedom” for the future.

How can opponents and proponents of this one bill come to such vastly different conclusions?

What does “internet freedom” have to do with a deregulating bill being pushed by one of the country’s biggest and oldest landline telephony oligarchs?

And who, exactly, is right about this bill’s true nature?

Read moreWill Telephony Regulators Lose Their Teeth With VoIP Adoption?

Should The USF Cover Broadband?

The Universal Service Fund was founded for an undeniably positive purpose- to amass the funds needed to make sure that everyone in the U.S., regardless of their economic status or geographic location, have access to advanced communication technology. While there are naturally a few opponents of the goals of this fund, support for providing universal access to top communication technologies tends to cross partisan lines. Access to communication technologies increasingly spells the difference between success and failure in today’s world and if we want to uphold our national dream of equal opportunity, then we need to make sure all of us have regular, reliable and affordable access to the same communication tech.

Setting unbridled idealism aside, we can just about all agree that increasing access to telecom services within poor communities is a good thing.

Read moreShould The USF Cover Broadband?

USF AND FLAT RATE PRICING PLAN (PART 2)

Back in 1996, it was still possible for telecom companies to split their service plans into a number of different revenue streams. Telecom companies were able to say, with total specificity, how much of their revenue came in from international calls, how much of their money arrived from beeper use, how much money they had coming in from local calls, and yes, how much end-user revenue they earned from interstate communication. Telecom companies could do this because these providers tended to charge based on specific usage. Each time you wanted to communicate with someone interstate you had to pay to do so, creating a firmly defined revenue stream that was easy to track, add up, and, yes, tax for the sake of bulking up the USF.

Nice Pricing Models = New Taxation Headaches

With the massive explosion of mobile devices fewer and fewer telecom providers continue to charge their customers based on usage. At least usage that’s as specifically defined as it was back in 1996. These days pricing tends to follow the model of flat-rate pricing, which basically states “a call is a call is a call is a call.”

Local calls and interstate calls now cost the same amount of money. And that’s to say nothing of the various other simplified payment plans that really mess with the idea of the USF’s tax plan. How can you accurately tax interstate communication if it’s included within an unlimited calling plan? How much of the cost of an unlimited calling plan’s price goes towards providing interstate communication?

Read moreUSF AND FLAT RATE PRICING PLAN (PART 2)