Savings, cost efficiency, scalability – a few of the oft used words to describe why VoIP is the better choice than traditional telcos. It’s a routine point of persuasion -then again, nothing stays new for long. This inspires a wealth of questions, especially in VoIP solutions being able to sustain that “lower” price for long, as popularity grows alongside increased regulation. The fact of the matter is, VoIP might not save you money indefinitely, and here’s why:
Big Names Want a Piece of the Pie: As mentioned above, major telephone companies are well-versed in the notion that focus on data lines is the place to be right now. In addition, big name companies have no qualms about charging more for services that are “cheap” or free elsewhere, winning business on name alone. For service providers that haven’t been in the game long, this is difficult to compete with, though there’s always hope. It’s no mystery major telephony mainstays are looking to make the transition to IP telephony almost immediately [see AT&Ts big investment], doing everything in their power to stay in and ahead of the pack.
Companies Must Play Nice: Personally, I’m always fearful of what my ISP might do to get in on the action, as they [Time Warner Cable] have exhibited a pattern of leaving customers in the dust over disagreements involving network strain. Avoiding too much digression, a stalemate between TWC and Netflix has forced me to deal with grainy video streaming – no HD due to a the lack of a “cut” of Netflix’s consumer base for opening up bandwidth. Impossible when it comes to VoIP? I’ll admit it’s a stretch, but trickle down costs make things difficult/expensive for one or both parties.This is bound to occur here and there, especially when VoIP turns into a pervasive means of communication, and auxillary companies develop a greater sense of entitlement fueled by profits. Voice providers may very well deny ISPs the money they think they deserve for powering the transmissions, which could result in higher costs. Ideally, nothing of the sort will occur.
An example of how State/Federal taxes and fees can add up quickly.
Taxes on the Rise: Without question, the cost’s of wireless service have increased significantly over the years, as the cost of this service runs at about a 16.23% local tax rate in New York State – a rank of #1, with a combination of fees and levies. Though VoIP service is immune to these specialized fees (for now), there’s no saying that the technology won’t get drawn into the vortex as VoIP moves from a growing trend to a commodity, ripe for taxation that would inspire more than a ‘tea party-esque’ disapproval.
As a fun activity, take a look at the first bill with your wireless provider, and finally at your most recent bill. Notice an increase in price (for me, it’s nearly 30 bucks) – that’s due to the increase in high tax rates since you signed a contract. Fortunately, there is still FCC preemption of state-specific market entry requirements and rate regulations of nomadic VoIP service keeping state taxes at bay. Nevertheless, many states continue to aggressively seek in-roads which would permit them to bypass FCC orders and collect State USF Fund assessments on VoIP revenues. Yikes…
There really aren’t any absolutes when it comes to price increases, though these factors are really something to chew on. Odds are, you are highly likely to see an increase in the cost of your telephony solution, in one way or another. This is especially true if you’re electing for month-to-month subscriptions, which could inevitably change at any time. We’ll be keeping a close eye on industry trends and crossing our fingers that this degree of change is gradual at best. Fighting any sort of increase in price? Well, that’s to be considered an exercise in futility.