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Higher VOIP fees result of FCC’s decision not to regulate

Wednesday, Nov. 17, 2004
Contact: Mark Cooper, 301-807-1623
Susanna Montezemolo, 202-462-6262

SBC Plan to Put Higher Fees on VOIP Rivals Result of FCC’s Failure to Provide Regulatory Framework
Costs likely to be passed to consumers; will stymie competition

(Washington, D.C.) – SBC Communications’ plan to place higher fees on rival Internet phone companies — which ultimately will be passed on to consumers and stymie competition — is a consequence of the Federal Communications Commission’s decision last week to block state regulation of Internet phone service (VOIP) and provide no regulatory framework.
“SBC can simply walk in and slap new fees on its competitors in the Internet phone business because the FCC has failed to address a comprehensive framework for this new technology,” said Mark Cooper, director of research for Consumer Federation of America. “What we’re seeing is a direct consequence of the FCC’s decision to pre-empt state law with respect to VOIP and not provide an overall solution.”
Last week, the FCC found that Vonage’s VOIP phone service is an “interstate” service that is not subject to state jurisdiction, but failed to address a comprehensive framework for public safety, consumer protection and universal service.
“These higher fees will just get passed on to consumers, and the FCC has no plan to address that,” said Susanna Montezemolo, policy analyst for Consumers Union, publisher of Consumer Reports. “And as the cost of VOIP goes up, consumers will continue to lose out because this new technology won’t be the low-cost competitor to traditional phone service that many had hoped for.”
Added Cooper: “Imposing fees is only part of a strategy that the Bells will use to undermine competition for VOIP, which will include discrimination against competitors and the refusal to allow consumers to buy only DSL service while taking VOIP from a competing company.”