Kansas wants to impose telephone fees on VoIP calls

• The Federal Communications Commission has directed Kansas lawmakers to water down proposed legislation aimed at assessing state fees on Internet-based phone services.
• On Friday, the Kansas House Utilities Committee held its first hearing on the bill, which would require customers of Voice-over-Internet-Protocol (VoIP) to pay monthly fees that finance two state subsidy programs.
• An FCC staff analysis concluded that a state can't require VoIP customers to pay into the state universal service fund, Rep. Tom Sloan, R-Lawrence, said in testimony Friday.
• The universal service fund is financed by fees on monthly phone bills to help subsidize rural phone service.
• The Kansas bill, introduced by the Utilities Committee, also would require that VoIP customers pay 50 cents a month to finance enhanced 911 services that can pinpoint a caller's location from any phone line.
• Opponents of the legislation include startup VoIP providers such as Overland Park-based Nuvio Corp. and Time Warner Cable (NYSE: TWX), which uses VoIP to provide phone service.
• They argue that it is technologically impossible to pinpoint where a VoIP caller is when they call 911, other than using their billing address.
• Talley said the FCC should decide the fate of 911 fees when the problem eventually is solved.
• He expressed concern that the state 911 fees would not be used to buy equipment to find VoIP calls -- because the technology doesn't exist.
• Judy Moler, general counsel of the Kansas Association of Counties, said public policy will force VoIP companies to come up with a technology that can find where a 911 call is placed.
• "We need to be aware that technology changes," she said.
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