Excise Tax on Communications Ends Credit: By Kelly M. Teal

  Service providers no longer are paying the 3 percent federal excise tax on long distance, wireless, VoIP, prepaid and other communications traffic. The collection end date was Aug. 1, but some carriers, including Verizon Communications Inc., stopped earlier.

The U.S. Treasury Department in May 2006 said it would concede the legal fight over the federal excise tax on long-distance telephone service and require the Internal Revenue Service to issue refunds to consumers and businesses for proceeds paid over the past three years. The 3 percent tax originally was established in 1898 as a “luxury” tax on wealthy Americans who owned telephones, because the government needed to finance the Spanish-American war. The Treasury Department and phone companies had said the tax on telephone calls was not compatible with communications in the 21st century.

Verizon stopped collecting the tax on June 1. “This is a good first step in alleviating consumers’ telephone tax burden, which currently accounts for more than 18 percent of the average bill,” said Robert Ingalls, president of the company’s retail markets group.
 

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Building VoIP Into the Business Infrastructure   Credit: By InfoWorld / Top Tech News.

     Voice over IP is slowly but surely making strides at organizations far and wide. According to Infonetics Research, 36 percent of large organizations were already using VoIP products and services in 2005. And a few are embracing the full promise of VoIP, which is the creative integration of voice and data in ways that change the way people work.
There is no killer VoIP application that spans all markets, but there are select environments in which the integration of voice and data are solving real-world problems. Here's how four very different organizations are using VoIP to address an array of business challenges, transforming their operations in the process (see also "The full promise of VoIP edges nearer" and an interview with VoIP expert Jeff Snyder, chief analyst at Gartner).

Subway Stays on Track and on Schedule: When Les White expanded his franchise of Subway eateries from five to more than 30, he was naturally concerned about maintaining a high level of customer service through a good working relationship with an expanding roster of employees.

"You need to be there to cultivate staff with good people skills," White says. "But you're dealing with 16- to 22-year-olds who have trouble staying on task and sometimes don't show up."

Verizon's Wireless Airwaves Binge  Credit: By Olga Kharif

    Verizon Wireless (VZ) wants access to airwaves. Lots of them. That's why the No. 2 U.S. mobile-phone company has emerged as one of the biggest bidders in Auction 66, the largest U.S. government sale of airwaves for sending wireless calls and data.

It wasn't supposed to be that way. Verizon Wireless would be a spoiler, or so went the conventional wisdom. When the Federal Communications Commission began auctioning this chunk of airwaves on Aug. 9, Verizon Wireless would show up for a few rounds. If nothing else, it would jack up prices for rivals like Cingular Wireless, owned by merger partners AT&T (T) and BellSouth (BLS). But since Verizon Wireless already has access to plenty of airwaves, it probably wouldn't hang in there to the end.

STAYING IN THE GAME: Or would it? Verizon Wireless, bidding under the name Cellco Partnership, is among the biggest bidders in an auction that's expected to fetch about $14 billion, the most ever in a single U.S. government airwaves auction (see BusinessWeek.com, 8/25/06, "Who Needs Radio Frequency?"). Cellco's bids are worth $2.8 billion. If successful, the provider could walk away with enough licenses to build a new nationwide wireless network—say, one that's devoted exclusively to mobile TV, or some form of high-speed wireless Internet access, says Chris Hardy, vice-president and general manager at spectrum consultancy Comsearch.

Blimp Cell Service Idea Floated    Credit: Associated Press

     PALMDALE, California -- Bob Jones has a lofty idea for improving communications around the world: Strategically float robotic airships above the Earth as an alternative to unsightly telecom towers on the ground and expensive satellites in space.

Jones, a former NASA manager, envisions a fleet of unmanned "Stratellites" hovering in the atmosphere and blanketing large swaths of territory with wireless access for high-speed data and voice communications.

The idea of using airships as communications platforms isn't new -- it was widely floated during the dot-com boom. It didn't really fly then, and Jones is the first to admit the latest venture is a gamble. Tethered flights of a prototype -- which cost about $3 million to build and is about one-fifth scale model of the planned commercial airships -- are scheduled later this month in this Mojave Desert city, about an hour's drive north of Los Angeles.

Jones says it will be a critical test of the technology. "I don't want to see it fall on someone's back yard or have it float away to Las Vegas," said Jones, president of Stratellite developer Sanswire Networks. 

Wiretap Ruling Threatens Telecoms  Credit: Catherine Holahan and Dawn Kopecki

     Telecommunications and Internet companies accused of working with the Bush Administration's domestic eavesdropping program could be in for more legal headaches, after a federal judge ruled Thursday that the warrantless wiretaps violated the constitution.

U.S. District Judge Anna Diggs Taylor in Detroit dealt a major blow to the White House in a 43-page opinion that said President George W. Bush exceeded his authority and that the program violated the First and Fourth Amendments protecting free speech and privacy. She ordered the National Security Agency to immediately halt a secret program that monitors telephone calls and e-mails of Americans that are in contact with suspected terrorists.

FUTURE FIGHT. The federal government plans to appeal the case, which appears headed for the Supreme Court. The American Civil Liberties Union, which brought the suit against the NSA, agreed to temporarily allow the wiretapping program to continue, while the Justice Dept. prepares to fight the court's decision at a hearing scheduled for Sept. 7.

Sprint Nextel Invests $3 Billion Into Next-Gen Wireless   Credit: Jay Wrolstad

     Sprint Nextel plans to roll out a mobile broadband network that delivers video, music, and other large files at speeds approaching those of a DSL connection in a broad array of portable devices.
Sprint 's plans focus on deploying a WiMAX (Worldwide Interoperability for Microwave Access) system, with help from I.T. giants Intel, Motorola, and Samsung. Together, the partners will develop the network infrastructure, as well as mobile WiMAX products, to deliver wireless broadband services for an array of portable devices.

WiMax, in essence, creates hotspots that stretch dozens of miles, or metropolitan areas, and allow users to surf the Web wirelessly at speeds that match or exceed connections via a DSL or cable modem.

The $3 Billion Bet: Company spokesperson Lee Horner said the fourth generation (4G) mobility network will operate on Nextel's network, which covers 85 percent of the households in the top 100 U.S. markets. The rollout, to cost an estimated $3 billion, will begin by the end of 2007, with WiMax becoming available to most of the country in 2008, she said.

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