Long Distance - Part 6
November 17, 2003
There
are many tumultuous issues ahead for "long
distance". Not the least of which is that the term "long" soon
won't mean anything. Hard to believe, but years ago, when the phone rang
with Aunt Sally calling from thousands of miles away, the whole house
would turn silent. "Quiet",
people would say, "I am on long distance". It was something special.
Sometimes the quality of the call was not that good, and every minute was
precious -- and expensive. As you have read in other stories here
at patrickWeb, long distance is very inexpensive when using Internet telephony.
Rates will continue to come down as more and more alternatives
to traditional "long
distance" service
emerge. Most of them will be fixed monthly fees for "long distance". This
is because the true cost of a voice conversation over the Internet isn't
much different whether you are calling Boston or Beijing. One thing that
is not going down is the tax associated with telephone service. (read
more)
Long distance is expensive, but the real burden comes from the taxes. I am sure that all of my readers can top this example, but I was really taken aback by the Verizon bill I received today for phone service at my weekend place.
Charges for phone service
Dial
Tone (touchtone) at Residence: $5.68
15
minutes of "local" calls:$.80
Taxes and fees
Pennsylvania
Relay Surcharge: $.08
Public
Safety Emergency Telephone Act (9-1-1) Fee: $1.50
Federal
tax: $.40
Regional
calls (all less than 100 miles away): $2.79
Pennsylvania
tax on utilities: $ .96
Federal
line cost charge: $6.10
Local
Number Portability Surcharge: $.23
Federal
Universal Service Fund Surcharge: $.59
The above tabulation shows why governments don't like Internet
telephony. The jury is still out generally speaking, but at least one court
so far has ruled that Internet telephony is a "data" service not
a telephony service, and therefore not subject to telephony taxes.
Meanwhile, purchases of clothing or electronics or books on the Net are
not subject to sales tax unless the seller does business in your
state. That makes no sense. I really don't mind paying tax on items
I buy, regardless of whether it is at a store, from a catalog via telephone,
or on the Net. Sales tax makes sense to me -- we need state and local governments
to provide services. I can see the connection -- even though I would like
to see more efficiency at all levels of government. When it comes to taxing
telephony services that contain artificial costs, I don't see the connection.
Other
patrickWeb stories about Long Distance