Wider impact for tax ruling?

it would be refreshing to see Baltimore and other cities along with our state and federal government use the money they leech from us responsibly, instead of nightmaring newer and more insiduious ways of relieving us of yet more of our hard earned money!! how about quit giving it to those who can do for themselves and let us alone. or even quit handing out contracts to friends & family members.

The recent ruling that Vonage should be subject to a monthly telecommunications tax of $3.50 per customer line is somewhat akin to one drowning person attempting to save themselves by grasping onto the poor soul next to them.

As stated in the your article, Vonage has yet to turn a profit, and the fledgling VoIP industry remains in a very fragile state. Being a Baltimore native, I empathize with the City's desire to build its tax base and service its citizens. Yet, by one drowning person (Baltimore City) grasping at the legs of another (the VoIP carrier industry), both may ultimately lose. In the end, that cost cost all of us.

One of the more prominent VoIP competitors to Vonage - SunRocket - suddenly closed their doors last year, leaving a large number of customers with not even so much as a busy signal. The traditional local exchange carriers - the local phone companies - and the facilities-based cable companies have the wherewithal to pay such taxes. The smaller, more entrepreneurial and more innovative service providers do not, yet it is those companies that are driving costs down and introducing new capabilities.
VoIP carriers have a difficult time becoming and remaining profitable because margins are already quite thin. Adding this tax may be the first step onto a slippery slope that will include increased regulation, continued threat from frivolous patent suits, and ultimately result in a chilling effect regarding the increased services and dramatically reduced costs that we have seen for interstate and international telephone services in the past few years.

As legislators, regulators, businesses, and citizens, we are faced with serious choices. Do we wish a return to high prices and begrudging innovation or the opportunity to see dominant service providers challenged by the upstarts of the Internet? How many more financial hits can the Vonages and other smaller VoIP service providers take before they go the way of SunRocket?

This may seem like one tax in one jurisdiction, but be careful! That might just be someone grabbing at our legs too!

Joel Maloff
Director of Marketing
BandTel

Former Baltimorean
BS-Mass Communications
Towson State College 1973

Surely if Vonage is liable so is Skype. Skype is a VoIP business that provides telephony services. The only difference from Vonage is implementation, which I would think is not the Court's interest. If I were Vonage, I would certainly work to see the law applied fairly and that all Skype users with a Baltimore address (IP or postal) were billed for the tax.

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