MILKING IT

For those lucky enough to get it, it's hard to give up that few hours of overtime pay every week. You know you shouldn't, and you swear you won't, but before you know it, you've worked it into the household budget. You start living like you're a $70,000 per-year man, but you know you're really at “sixty-two five.” Then the boss comes by three weeks before that golf trip your bride finally said you could go on and tells you that overtime has been cut for the summer. Suddenly, you're a man with empathy for the poor regulators in Wisconsin trying to decide how to manage VoIP.

After all, if it's painful to forgo a weekend of golf and decadence with one's buddies, imagine how hard it would be to give up a stipend worth…oh, say, $65 million. That's about how much SBC Communications pays the state of Wisconsin every year in taxes for selling telecom services to its farmers, hockey players, outdoor sportsmen and Green Bay Packers.

Imagine, too, being faced with losing another $22.3 million in universal service fees. Given the way you felt when your golf trip fizzled, you certainly could understand why regulators reacted the way they did when a little company called 8X8 wanted to sell Internet-based voice services in their land of milk and honey.

Wisconsin was the second state in a month to say that Internet-based voice services should be regulated. Why? Because in the extremely unlikely scenario that a little Internet company like 8X8—or even 10 or 12 more like them—could take all of SBC's customers away with their tax-free packet network, the state of Wisconsin stands to lose up to $87 million.

That is essential revenue, to be sure. (Should it be, though? After all, 61% of the Universal Service Fund goes not to providing basic and emergency services to the disenfranchised as intended, but to the Educational Telecommunications Access Program, a conglomeration of libraries, schools and nonprofit groups—a.k.a. churches and museums—that get subsidized Internet access. I swore property taxes and Sunday collection plates managed all that.)

No, America's Dairyland is not about to let go of this cash cow by leaving VoIP unregulated, even though it could provide consumers the low-cost alternative that is the state's true mandate—not subsidizing libraries or investing $739,500 in a for-profit pet project of former U.S. secretary of education William (“Never leave a job finished”) Bennett's called K12, which promotes remote, computer-based schooling.

VoIP providers are up against the ultimate double standard here. State regulators are perfectly willing to order local phone companies to give up access to their facilities in order to promote competition and hold the line on pricing. But when it comes to giving up that overtime for the same reason, they just can't let go.