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Vonage Starts Charging 'Regulatory Recovery Fee' 239

Posted by timothy
from the bureaucrats-circle-like-buzzards dept.
slavitos writes "Vonage sent an email announcing that starting with 'your next billing cycle, Vonage will begin to charge a Regulatory Recovery Fee of $1.50 per phone number. This is a fee that Vonage charges its customers to recover required costs of Federal and State Universal Service Funds as well as other related fees and surcharges. State and Federal agencies collect these fees from communications providers to fund public projects such as rural and library communications programs.' That could mean that Vonage is losing at least some ground in its battle against government VOIP regulations."
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Vonage Starts Charging 'Regulatory Recovery Fee'

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  • "That could mean that Vonage is loosing at least some ground in its battle against government VOIP regulations."

    Looks like the only people losing ground are their customers.

    On the flipside, I don't understand how governments can possibly expect to tax such things, yahoo messenger can do voice chat, will we see taxes on that? What about the millions of other VoIP programs out there? Eventually the government will realize there are some things that you just can't regulate.
    • by Wesley Felter (138342) <wesley@felter.org> on Saturday September 20, 2003 @08:30PM (#7014514) Homepage
      Vonage is different from IM and voice chat because it interconnects with the PSTN and thus Vonage counts as a phone company.
    • Eventually the government will realize there are some things that you just can't regulate.

      Wow, that's optimistic. The government regulates the size of toilet tanks. I think they can latch on to this too.

      • The government regulates the size of toilet tanks.

        Yes, but you can protest peacefully against this orwellian state and declare yourself in civil desobedience by putting a brick in your toilet tank.

        Gandhi would have approved ...
        • Yes, but you can protest peacefully against this orwellian state and declare yourself in civil desobedience by putting a brick in your toilet tank.

          Actually, I'm afraid you have it backwards. The federal law mandates a maximum size for toilet tanks. Putting a brick in your tank effectively makes the tank smaller, not larger.

    • Yahoo doesn't act like a phone, people can't pick up the phone and call your Yahoo ID to talk to you. VOIP uses a phone with a phoneline connected to a box which connects to a cable modem or dsl modem, or even into a router. Ofcourse there is a reason to tax it, from a goverment perspective, a source of revenue, its just like anything else, like taxing clothing.
    • Looks like the only people losing ground are their customers.

      What they failed to mention on this article is that in addition to the $1.50 fee being added, they are also dropping the "Unlimited" plan by $5... Still works out cheaper, and it still works out cheaper than any of the top tier POTS providers.
  • I believe this just goes to show how good their service really is. They are not a tiny company in a garage anymore. They are big come competing with the likes of SBC, Verizon, and MCI.
  • State and Federal agencies collect these fees from communications providers to fund public projects such as rural and library communications programs Since customers are paying for it, the charge is on the customers, not the communications provider. Is the charge fixed per provider or based on number of customers they have? Coz if its a fixed a fee, then the provider having more cutomers will make money off this surcharge.
  • by backlonthethird (470424) on Saturday September 20, 2003 @08:31PM (#7014524)

    the unlimited Long Distance plan dropped today from $40 / month to $35 / month, the local plan dropped a buck from $26 to $25. Now I know why

    I haven't gotten any emails yet, but I'm not surprised. I'm still waiting for them to get their act together in terms of getting my existing phone number transferred (The fax I sent them magically appeared when I threatened to end my patronage).

    They seem to be so severely understaffed it makes my head spin. I have twice now sat on hold for over a half hour - at which point I am allowed to leave a message instead of speak to a real human being.

    They clearly know their limitations, though, when I called to complain about how long it was taking to get my service up and running, they credited me a month before I could even launch into my bitch. All I could say was "habidah, whosiwhah, zibit.. I'm buying you a pizza!"

    Finally, if their site stands up to the slashdot effect I'll be shocked to the core, as it's slow to begin with. I wonder if their VOIP has to make heavy use of their servers or if its more direct. If Slashdot can interrupt my phone service, I'll be ticked!

    • Yeah, I got an email earlier today about that. I don't mind the fee so much since they're dropping their rates.

      By the way, I too had problems getting my service switched over. Specifically, it was problems with their upstream (and Verizon) getting the transfer done. They ended up crediting me with 2 months of free service on both of my accounts while this was going on. I didn't have to fight with them, I just had to ask.

      Yeah, their support can be a little slow. But for the most part it's not bad. Th
      • I am also willing to put up with a little more since I get the added pleasure of not sending money to Qwest, and I do find that once I get a hold of somebody it has been great.

        I am using it for residential, so I won't need the fax. Incidentally, the whole "Fax on top of Voice on top of IP" seems a little odd to me, wouldn't you be better served using a more direct method (i.e.a web gateway or fax application on your computer)?
        • I am using it for residential, so I won't need the fax. Incidentally, the whole "Fax on top of Voice on top of IP" seems a little odd to me, wouldn't you be better served using a more direct method (i.e.a web gateway or fax application on your computer)?

          Agreed that it is a little silly from a bandwidth point of view, but if you have to send a handwritten document (e.g., a form you've filled out) to someone with a fax machine, just being able to throw it into the fax machine (as opposed to logging on, scann

    • This all may be true, but I signed up for service on Friday, and they sent out my Cisco ATA-186 box and start up kit the same day, I had my UPS tracking number by Friday night, and it was in New York City by Saturday morning (and will be at my apartment Monday morning, presumably). If that's not fast service, I don't know what is.

      Granted, I've heard at least one tale of modest set up woes (a broken proxy server on their end made the call forwarding very unreliable until my friend finally got somebody at

    • If there using the same bandwidth for there server as they are for there VOIP, you should be ticked.
  • Well no matter what the money tends to go into the same pockets anyway. Would that be a force of nature or something? :)

    • "Human Greed" certainly qualifies as a "force of nature". Like a hurricane, asteroid strike or massive forest fire, it results in species extinctions, rapid irreversible small-scale habitat changes and semi-permanent global climate changes... Things that make ya go hmm...

  • by Anonymous Coward on Saturday September 20, 2003 @08:33PM (#7014536)
    Unfortunately, the FCC permits telephone companies to charge absolutely anything they want to under the Federal Universal Service Fund category. In the U.S. your telephone company can (and does) charge you more than they have to pay into the FUSF, and they pocket the difference. If you complain to the FCC about being overcharged, the FCC will tell you that they only set "recommended" collection amounts, but that companies are free to charge what they wish, and that if you feel you are being overcharged, you can switch your local telephone company to a local competitor. Of course, you may only have one local provider.

    Vonage, like most other companies, has simply realized that they can charge anything they want to and pocket the difference, and that the FCC will let them do it.
  • I'm sure i've said it before. Just tax the damn line, not the virtual connection.

    To be fair, let's include cable, dsl, satalight, and other forms of two way communication systems which can be used for 2-way communications . While that would suck, it would save a hell of alot of bother with VoIP services which are out either out of state, or perhaps out of country.

    Just taxing the endpoints of the physical line would solve juristion issues, and unfortunatly is the only means of taxing fairly.

    After all, t
    • It could never be so simple. Cable companies are unregulated and not considered telecommunications carriers, so they don't generally have to deal with the univesal service fee--unless they are also selling phone service, in which case they get to collect it.

      DSL customers pay the fee in one way or another, as them copper pairs coming to your house _are_ considered telecom stuffs, even if like me, you don't have a voice line.

      If your cablemodem is out all the time you don't have anyone to complain to other t
      • It could never be so simple. Cable companies are unregulated and not considered telecommunications carriers, so they don't generally have to deal with the univesal service fee--unless they are also selling phone service, in which case they get to collect it.

        Well... it could be simple if you made it simple.
        In reality, internet access if a form of two way communcation that is important to life as telephone access for many people. I rather thought the FCC was considering tacking on the USF to cable based i
        • I think you're probably right but I'm a little concerned that this would discoruage small ISPs and especially WISPs. These are the folks that are actually trying to provide services in the underserved areas that the USF is supposed to help but most of them are small 1-5 geek operations and you know how geeks are about paperwork :) An alternative, if the USF really is important to the well being of the country, would be to take it from the general fund. We'd still end up paying about the same but this wou
          • [valid point in parent, please mod up]

            I think you're probably right but I'm a little concerned that this would discoruage small ISPs and especially

            Ok, I can see WISPs being an issue. Should they be treated as a private "lan" or a public WAN.

            I'm not sure exactly how you mean about discourging small ISPs... as near as I can tell present ISPs them selves are not required to bill for the services, only internet over cable services which i'm not sure if that is presently implemented (dropped comcast recen
  • by Rosco P. Coltrane (209368) on Saturday September 20, 2003 @08:44PM (#7014590)
    - Vonage gets sued to oblivion by phone companies

    - People start using P2P VoIP phone applications en masse

    - Phone companies start sending out subpoenas to ISPs to discover the real name/addresses of these evil phone call thieves.

    - Phone companies sue 12 year old girl who was calling his grandfather and ask $15000 per stolen phone call

    - Phone companies say VoIP technology is full of kiddie porn ...

    Deja vu anybody ?
    • Phone companies sue 12 year old girl who was calling his grandfather

      I'm glad you can see it cos I'm confused now. Is this a case of phone company induced transgenderism or was the girl calling the Phone Company's grandfather illicitly?
  • A lot of companys are doing this nowadays, at&t wireless is now chargeing a 1.50 "regulatory programs fee" to help cover the cost of complying with a lot of new FCC rulings/regulations (one of the largest of these being Line number Portability (LNP)) The nice thing about making it a seperate charge like that is its easy to see on a bill so its easy to pass off PR wise, "Oh its the fcc's fault" And, at least in the case of attws, it has been promised that when the costs have been recouped the fee will be
    • LNP is the cost to 'restructre' the system to handle line number portibility. This is a fee that the FCC allows the phone companies to charges to re-coup expenses. I find it interesting that phone companies can't figure out how much it will cost, and that the estimated cost veries wildly from company to company.
      Also, Verizon is trying NOT to charge there customers anything.
  • Time for encrypted P2P VoIP.

    Somehow, I don't think this is a job for Freenet....
  • by linuxtelephony (141049) on Saturday September 20, 2003 @08:59PM (#7014671) Homepage
    I know it is an unpopular view to maintain, but VonAge IS a phone company, they market themselves as a phone company, they provide the same services as a phone company, so they should pay the same fees and treated like other phone companies.

    Just because they are use a different pipe into the home than a traditional telco should not exclude them from complying with the same rules and regulations a telco has to abide by.

    If you don't like the rules VonAge has to live with, then attack the regulations themselves that apply to all phone companies.

    VonAge is decidedly different than "voice" features in IM programs, or even outbound only low priced LD services. VonAge provides full featured, two way phone service. You get a phone number, people can call you if they are not on the Internet, and you can call people not on the Internet.

    They've gotten a free ride long enough.

    Other services are quite different. IM programs communicate between computers, or in some cases the computer user contacts a phone # somewhere. Other servicse provide out-bound only network to phone features. And so on. Each of these provides _some_ functionality of phone service, but not the full package. Thus, they should not get hit with telco regs or fees.

    It could be argued that out-bound network to phone long distance services could be considered a long distance carrier and should comply with those regulations -- but that would all depend on the details of the service provided. A blanket generalized statement would cause more harm than good.

    One thing further, if these services are considered telcos, then they should also be given common carrier status. If not, then they should not be considered a common carrier. If they are not a common carrier, then it opens them up to all kinds of legal nightmares, responsibility for content/control, possible liability, and more. You'd think they'd want to be a common carrier. They should not be allowed to claim "common carrier" and be excluded from phone company regulations.

    • "They've gotten a free ride long enough."

      Let's try and get it right. They is you and me. These costs are passed on to the consumer (collectively us). Vonage does not pay these fess.

      Even at $26.50 per month, my Vonage line beats the pants out of my old POTS line. The RBOCs need to stop trying to protecting their low margin POTS business and get in the broadband (via fiber) business. Get me fiber to my curb, they you can sell me phone, video, bb, etc...

    • Well, the real question is whether or not "common carriers" should be taxed as heavily as they already are. If Vonage is functioning as a common carrier they should be under the same regulations (and receive the same exemptions and protections!) as regular POTS companies do. But I am personally tired of the Feds (who already tax ALL of us) continually tacking on extra fees to my phone bill(s). Matter of fact it is really starting to piss me off.
      • And that's where you come of as the kind of fool the marketing people love...

        The FCC doesn't order anybody to put a "Regualtory Programs Fee" onto their bills. Such fees with names like that are created by the companies when they're saying "We're hiking our rates because the government is making us do X...", as a way of trying to get their customers to complain to the govenment to drop the regulations requirng X. It's like your grocery store putting a $1.50 fee on the bottom of every receipt marked "Refrig
        • wrong. you need to check your tax law. there are several specific taxes that are added to a phone bill. you should see a T1 bill.

          they are actual taxes that are federally mandated. Each one is quite small, but they add up. They pay for everything from 911 service to subsidizing phone service to rural areas.

          They are making sure you know its a tax so you will bitch about it, but not at them. The problem IS the taxes are rediculous.
          • I didn't say there are no taxes on a phone bill, I just said that "Regulatory Programs Fee" isn't one of them, and there are a whole lot of other bogus fees put onto a phone bill. It's like that IDT ad where they rag about another phone company charging a fee for their property taxes... that's just an excuse to get the word "tax" into what's truely a "fee".
        • I may be a fool but at least I can spell "Regulatory."
    • >ther services are quite different. IM programs communicate between computers,

      So will they refund this fee if all the phone calls I make are vonage to vonage, thus eliminating any POTS infrastructure? Or pro-rate a discount?

      This is more complex than regulatory fees can address. In fact, ask yourself what is being regulated here? Vonage uses (mostly) the public internet, so they're not a real phone company as much as a quasi-phone company.

      For instance, will we pay if we use our IM to send an SMS? Or
    • What always seems to be forgotten in this equation is the reason for the local telephone companies being regulated and thus being charged regulatory fees. The local ILEC has been granted a monopoly, and in an effort to protect consumers from monopoly abuse, that monopoly is regulated. So certain requirements are made of the ILEC: universal service, number portability, etc. Why is the ILEC granted a monopoly? Well because the only alternative is to allow almost anyone to run wires to your house. Before
    • Companies' PBX boxes do the same. They're not regulated as telecommunications companies.

      The deal with regulation is that ILEC's have a monopoly, because it's easier to dig one cable into every home (I say dig, I understand you USians still have overhead phone cables as well..) than to have 100 competing companies rolling out competing networks. In return for this monopoly, the ILEC must provide things like universal access, etc.

      VOIP carriers are more like LD carriers, except for the fact that at least one

  • Vonage is increasing the price, and trying to make people think they aren't.

    Answer: Try BigZoo [bigzoo.com]. 2.9 cents per minute in the United States. 2.8 cents per minute to France from the United States. 75 cents per month. That's all. I've used BigZoo for two years with no problems.

    No disad-Vonages.

    But, there is a question: Why is it cheaper to call France from the U.S. than someone in the United States? Is this to annoy George Bush? The U.S. is a nation with a lot of weird prices.
    • No, they're not increasing the price.

      What this story neglects to mention is that Vonage also lowered the cost of both levels of their residential service:

      Our Premium Unlimited Plan, which was $39.99, is now reduced to a monthly rate of $34.99. Our Unlimited Local Plan is reduced from $25.99 to $24.99. Your new lower rates will appear on your next bill automatically. There is nothing required on your part to take advantage of this cost reduction.

      Obviously the added tax sucks -- though I imagine the

  • Actually, it isn't a bad thing that phone companies break out their charges: at least we know that the Feds are grabbing yet another chunk of our monthly bills. And calling it a "regulatory recovery fee" is priceless ... it points the finger squarely to where it belongs, rather than having extra taxation masked by "higher rates."
  • It makes sense that there would be a charge for each phone number, as phone numbers are a limited resource shared with the traditional phone network. It is for pure VoIP applications, where the participants use some mechanism other than the phone system's numbering to find each other, that regulation doesn't make sense.

    Vonage doesn't seem to offer the service currently, but it should be possible to avoid this charge if you were willing to not have a phone number, and only take calls directed by your email
  • by Lumpy (12016) on Saturday September 20, 2003 @09:40PM (#7014860) Homepage
    I have to start charging a $1.50 check writing fee to offset my costs for paying my bill.

    I am getting really sick of these copanies doing scumbag things like this... their fees that THEY are charged are a part of doing business. Just like the bullcrap "destination fees" when you buy a car. Dont pay them, if the dealer is going to let a $20,000.00 deal fall through over some stupid $150.00 fee they will shut up. just like if you get people to bitch about this lame $1.50 fee they will also stop.
    • I am getting really sick of these copanies doing scumbag things like this... their fees that THEY are charged are a part of doing business. Just like the bullcrap "destination fees" when you buy a car. Dont pay them, if the dealer is going to let a $20,000.00 deal fall through over some stupid $150.00 fee they will shut up. just like if you get people to bitch about this lame $1.50 fee they will also stop.

      Their business model obviously didn't anticipate having to pay this regulatory fee. Quite sensible re
      • The cost of them doing business has just gone up, just as McDonalds costs would go up if the price of beef were to suddenly double. And, just as McDonalds would have to raise its prices in that scenario, Vonage is now having to raise its prices to take account of these additional costs.

        So, if the price of beef doubled, do you think they would just increase the price of a Big Mac to $6.00 or that they'd advertise and charge $3.00 and then collect a $3.00 "beef price adjustment surcharge?"

        • So, if the price of beef doubled, do you think they would just increase the price of a Big Mac to $6.00 or that they'd advertise and charge $3.00 and then collect a $3.00 "beef price adjustment surcharge?"

          I would expect McDonalds (as other businesses have done in the past on countless ocassions) to point out the reason for the price increases somewhere, definitely in poster form in their restaurants and most probably in their advertising too.

          It wouldn't matter to me what they labelled the price increase
    • I am getting really sick of these copanies doing scumbag things like this... their fees that THEY are charged are a part of doing business.

      It's capitalism; they charge more then what it cost them and pocket the difference. Whether they directly put the $1.50 tax on the bill or hide it in one big cost, you're going to end up paying it.

      if the dealer is going to let a $20,000.00 deal fall through over some stupid $150.00 fee they will shut up.

      You'll pay the fee one way or another. If the dealer's willing
  • It's sad to see it go this way, but I guess it is fair. Last time I was reading my phone bill there was all sorts of charges such as the "Carrier Universal Service Charge" and the oh so classic "Universal Connectivity Fee" and of course the "Charge for Network Access" which for some reason they just can't call "renting our wire." It really does get confusing, at least Vonage will have a single line/single charge and you actually know what it's going towards.

    Telcos are notorious for these charges, althoug
  • In other words... (Score:2, Insightful)

    by inode_buddha (576844)
    Taxes. Hidden, but still basically taxes. All that's really happening here is that Vonage is passing the bill along to consumers.

    That's why my landline phone bill averages out to about $70/mo in the Buffalo, NY region, even though the actual service is about $40. This is without making *any* long-distance calls, using Verizon (local incumbent monopoly, FWIW).

    If you think that's bad, you should see what the electric looks like here, esp. after the blackout.
  • I don't want more taxes. Period. None. In as many ways as you can think of. Even if it means cutting certain non-essential services. Even if it means that the government must undergo radical change! (perhaps especially in that case)

    That all said, if vonage must pay the tax, then it is fair that they pass on the EXACT amount of the tax to the consumer, unless it is a tax on PROFITS. Tax on revenue should be passed on to the consumer, PROVIDED THAT THEY WOULD FEEL COMFORTABLE PASSING THIS ON TO ANOTHER
    • It's not a tax, it's a regulatory cost of doing business that they itemize to:

      - make it look like a "tax"
      - advertise an artificially low price

      Traditional phone companies pull this same crap--Vonage is just copying that standard practice.

      • true, but since many of the comments on the thread were talking about taxes, I figure'd I'd address the topic.
        But this illustrates a point: we are so used to getting slapped with wild and uncontrolled taxes, that most people are rather unexcited about the whole thing, when they should be madder than a unwilling eunuch.

        However, even with this "regulatory cost", they are still cheaper than most phone companies--and will remain so until they gain enough of the market to sustain monopoly-like practices, OR the
  • What the heck is wrong with people? Once you get on the internet, does everybody forget how to spell lose (rhymes with booze), meaning "to miss from one's possession", "to undergo defeat"? Why are people spelling it loose (rhymes with goose), which means "not rigidly fastened or securely attached", "slack" and "to release" (as in "loose your arrows)? I've seen it in manuals, websites, even brochures for supposedly profitable companies. Is the entire English speaking world in a conspiracy to drive me mad? Wh
  • Lets say you are driving down the road and you come up to a toll booth. The sign says: $0.25 toll charge for cars. So you hand the toll collector a quarter. Upon doing so the collector says, "I need another $0.10." and you reply "But the sign says the toll is only $0.25.", and she replies "Yes the Toll is only $0.25, but the toll booth agency wants more money. So we'll be taking an extra $0.10". Shocked you say "But you can't do that. The legislators decide how much the toll will be." The collector grins
  • Socialism (Score:3, Informative)

    by trolman (648780) on Sunday September 21, 2003 @05:56AM (#7016557) Journal
    This is socialism imposed by the FCC. Write [fcc.gov] or call 1-888-CALL-FCC (1-888-225-5322) the bastards [fcc.gov] and tell them what you think about Universal Socialism [fcc.gov]

    My Verizon Tax Bill before Vonage:

    911 funding fee 0.50
    Dual party relay 0.11
    Interstate access charge 6.50
    Federal excise tax 0.85
    State telcom sales tax 1.6
    Federal Universl Service Fee 0.60
    Svc Provider Number Portablility Fee 0.36
    Universal Connectivity Charge 2.66
    Bill Statement Fee 1.50
    Federal Tax 0.80
    State and local tax 1.61
    Regulatory assessment fee 0.99

    TOTAL TAX 18.11

    So I figured a guess at the total take from Verizon lines at 18.11 my tax * 12 months * 135,000,000 customers = 29,338,200,000 Rounding it off to the even Billion for 30 Billion dollars a year in Tax. [daveblackonline.com]

  • ...if whoever wrote this up told us (us as in the rest of the world) what the heck Vonager is, and why the charge money?
  • by qtp (461286)
    Hey people, get real here. If you can access the 911 system through Vonage's service, there has to be some tax applied to pay for it.

    Of course it probably seem nice to have those who use POTS footing your bill. I bet that most of the posts criticizing this tax are from people who regularly complain that they are paying taxes that others don't have to.

    Death and Taxes are the only certainties you'll ever know. Get used to it.

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