Individual states are scared that customers switching to Voice over Internet Protocol (VoIP) services will threaten their share of access fees and taxes that are collected from plain old telephone service (POTS). Some states have introduced legislation that would require VoIP to collect fees and taxes similar to those collected from POTS, but analysts believe this could eliminate the cost advantage VoIP provides and could stifle growth of the nascent industry. Some in Congress want to head off the states' tax grab-which could lead to a mish-mash of different tax environments across the country—and place regulation in the hands of Congress.

the entire amended bill was passed by a vote of 13 to 9. Senator Sununu was not pleased. [ Read more ]