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VoIP to PSTN Access Charges

Updated on June 2, 2011

VoIP as a data service

We've often written about how VoIP is replacing conventional phones as time goes by. But the headaches of the telecom companies don't end merely with the threat of VoIP replacing their services. One of the biggest bones of contention these days is over what are called "access charges" where VoIP's data centric nature has a huge advantage. So what are access charges?

Customers don't think about which network the person who's receiving their call is on. They just dial a number and expect it to get connected. But if the originator of the call is on a different network from the receiver, then one network has to pay the other when the call moves through the barrier. In long distance calling for example, there might be a rural carrier who charges other networks for all the calls which are made to the people in that area. These access charges form a significant bulk of the revenues which accrue to any telco.

But VoIP doesn't need to pay these charges and this is a source of heartburn for many in the telecom industry. The reason? VoIP is a data service and not a communication technology. Since Internet access is charged by the packet instead of how much time is spent online, the access charges rules don't apply.

VoIP and the FCC
VoIP and the FCC

FCC Intervention and the reorganization of the Telecom Industry

This battle is an old one. A simple search on the Internet will reveal complaints by the telcos about VoIP since 2005 and even earlier. Of course, VoIP wasn't as prevalent then as it is now and so it wasn't much of a problem. But even though VoIP has gained huge traction today, it's set to grow even bigger in the future and its impact on the telecom industry is going to be immense. This presents a problem for the FCC which is now beginning to realize that the telecommunication model was flawed to begin with.

It's true that VoIP is a data service. But it's also true that as long as VoIP providers don't have to pay the access charges, they'll always have an unfair advantage over the telcos. But there's not much to be done about it other than a complete overhaul of the nation's telecommunications infrastructure to reflect the reality of broadband instead. Ambitious as this may sound, it's something which the FCC seems to be looking at pretty closely. The entire industry is in a state of flux and we're only just beginning to find out what it means for everyone involved.

VoIP calls originating from a remote SIP proxy server present a challenge for regulators. But one thing is clear - VoIP is changing our world for the better. Switch to Hosted PBX for your business and reap the benefits!

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