Congressional panel to vote on bill to ban VoIP taxes

A U.S. Senate bill that would ban states from taxing and regulating Internet phone calls will face its first hurdle in a committee vote next week.

Sen. John Sununu, R-N.H., said Tuesday that the Senate Commerce Committee has scheduled a vote on his voice over Internet Protocol (VoIP) bill on July 20 at 9:30 am. If approved by the committee, the bill--which is moving forward at an unusually rapid pace--would be sent to the full Senate for a floor vote that could take place this year.

"It is a simple choice for members: vote to establish a clear legal regime based on technological innovation and consumer choice or vote in favor of multilayered regulation of VoIP that will let chaos reign," Sununu said in a statement. "Those who use e-mail and instant messaging should know, if members vote to regulate Internet applications such as VoIP, those technologies are next."

Approval by the Senate committee is far from certain. At a hearing in June, some Democrats and Republicans complained that they could not support Sununu's bill because it did not permit states and counties to tax VoIP firms to pay for 911 service.

Another point of contention is universal service--a tax levied on phone lines to subsidize rural and low-income subscribers. Sununu's bill, called the VoIP Regulatory Freedom Act, says that VoIP firms that connect to the public phone network must "contribute, directly or indirectly," to universal service. It does not cover VoIP providers that do not link to the traditional phone network.

In addition, the Justice Department has indicated that it would like the measure's wiretapping rules strengthened. Laura Parsky, a deputy assistant attorney general in the Justice Department, suggested in an appearance before the committee in June that wiretapping requirements should cover Internet-only VoIP networks that do not touch the existing phone network, such as Pulver.com's Free World Dialup or the initial version of Skype.

[unknown unknown]

Wiretapping Net only VoIP (like Skype)...

That might be a little harder than the tech dinosaurs in the DOJ realize. Software can be developed in any country. Software developement done outside the U.S doesn't fall under U.S law. In the case of Skype, the software is made by Sharman Networks (the same people who make Kazaa) which is based in Australia and distributed over the Internet, make regulation by the U.S rather difficult. There are open source codecs developed specificly for VoIP, like Speex by Xiph.org (The developers of Ogg Vorbis). There are also open source encryption libraries that offer strong encryption like RSA and Blowfish. The chances are good that people are going to develop VoIP programs that aren't wiretapable due to encryption and falling outside of U.S jurisdiction.

[John Kuzak]

RSA and Blowfish

http://www.analogstereo.com/chrysler_town_and_country_owners_manual.htm

[LANjackal]

Hurray for no state taxes, BOO for Universal Service

Thank God someone is thinking straight. Banning state and local taxation of VoIP is a smart move that will allow the technology and its associated industry to grow.

However, universal service is a farce - as shown by a GAO study - and should not be charged. Anyone who want a telephone should pay for it themselves, it's not coming out of my pocket.

[Crux78]

What about the Grandparents?

So you dont want to contribute for Universal Service, eh? Well what about Gramms and Gramps out on the farm? What are they supposed todo? Gramma just fell down the stairs and broke her hip and Grampa is having a coronary b/c he's too old to carry her to the car. But hey, they're not your problem, right? You dont use their phone. Whats that you say? Just have them use VoIP... Oh, why that is a great idea. You sound like a famous out of touch monarch, only her line was "Let them eat cake." Sound familiar?