SANTA CLARA, Calif.— A Federal Communications Commission policy-maker underlined the financial implications of voice over IP in a speech here Tuesday.

For months, FCC Chairman Michael Powell has argued that the government should take a hands-off approach to VOIP, which uses the Internet Protocol (IP) to transmit voice information. But if VOIP takes off, the government will lose an important source of revenue that is being used to fund the communications needs of the poor, said Bob Pepper, chief of policy development for the FCC during a speech at the Voice On the Net show.

The problem is that universal service, used to provide a basic level of telecommunications services to underserved markets, is funded through interstate calls. Calls made between states can yield only a few cents in fees per call, but the total obviously adds up, Pepper said. In 2001, $99.3 billion worth of interstate calls were made, Pepper said. And, as wireless and VOIP calls become more popular, the source of universal service funding will decrease.

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