VoIP Users May have to Pay USF Surcharge Tax The FCC has itself floated out a proposal, stemming from Chairman Kevin J. Martin that aims to ensure that the government can continue to finance the federal Universal Service Fund. The USF is used to subsidize phone service in high-cost, difficult access portions of the country and is intended to make phone service affordable for millions of low-income consumers, and even covers reduced telecom and Internet rates for rural health-care, schools and libraries. It is expected to pay over billion in 2006 to provide these services and is currently funded by a surcharge tax on all landline and cell telephone accounts in the US.At present, wireless companies are assessed on up to 28.5 percent of customer revenue which would be raised to 37.1 percent under the proposal.But the big change is for VoIP – right now VoIP service providers are not required to pay into the fund and the proposal really changes that, proposing that they contribute on up to 64.9 percent of customer revenue. That is a huge change and could affect the current dynamic of VoIP services dramatically undercutting traditional landline phone service. The proposal will come before the Commission at its next open meeting June 15th.The VON Coalition estimates that this charge would add .77 to a typical monthly phone bill.This isn`t a huge change especially for deep-pocketed service providers that are providing services across multiple formats (cable companies for example). But it could hurt the smaller VoIP-only providers that may decide to absorb the charge themselves rather than pass it along to customers. Already slim margins could be eroded to nothing. This could affect even Vonage – they just raised over 0 million in their recent IPO but if they chose to absorb this charge rather than pass it on, it would cost them about million per month based purely on their current subscriber base.This proposal is by no means a done deal, however, if nothing else, recent bills on Net Neutrality touch on the issue, particularly Senator Gordon Smith`s Broadband For America Act that would do away with the USF in favor of other mechanisms.