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FCC raises service fees on wireless, Internet-based phone calls
Updated 6/22/2006 1:42 AM ET



By Paul Davidson, USA TODAY
Bills for many wireless and Internet-based phone subscribers may rise slightly after federal regulators Wednesday agreed to impose or increase universal service fees on the services.
Separately, the Federal Communications Commission launched a review of media ownership rules that could lead to more consolidation among broadcast and newspaper giants. The agency's two Democrats criticized the Republican majority for failing to allow for adequate public input.

On the universal service fees, a 10.9% charge on landline and wireless long-distance phone calls now subsidizes phone service in rural areas, among other things.

But the $7 billion fund faces a $350 million shortfall because DSL broadband services will stop paying into it this summer. The FCC deregulated DSL last year, and DSL bills could drop if phone companies pass the savings to customers.

Voice over Internet Protocol (VoIP) and wireless services must now make up the difference. Subscribers of VoIP services such as Vonage, which pay no universal service fees, will be hit with a 7% fee because the FCC assumes most of their calls are long-distance.

Vonage's Chris Murray says consumer impact will likely be minimal because of the government's recent decision to scrap the 3% excise tax on long-distance calls.

Most cable VoIP subscribers pay a 3.1% universal service fee, but that would jump to 7%. The standard charge for cellphone subscribers would rise to 4% from 3.1%.

The steps are temporary. A broad reform of the fee system is planned.

The FCC also opened a review of media-ownership limits, after a 2004 appellate court ruling that it must modify or better justify its relaxation of the rules the year before. FCC Chairman Kevin Martin, a Republican, has said his priority is letting a company own a newspaper and TV or radio station in many markets. He says the current ban is outmoded in an age of 200-channel cable TV and the Web. The agency will also study whether to permit ownership of two TV stations in small to midsize cities.

FCC Democrats Michael Copps and Jonathan Adelstein ripped the agency for failing to guarantee that the public will be able to review proposed changes before they're adopted. They also said the FCC should first complete its inquiry into whether broadcasters must air more local public affairs programs.

They also criticized Martin for not promising to review all media rules together. The FCC could ease just the newspaper-broadcast ban to head off the public opposition that helped derail the last effort.

Martin said the FCC should consider "the competitive realities of the media marketplace" while ensuring "localism and diversity."