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Vonage cries foul over Canada VoIP 'tax'

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Consumer IP telephony service Vonage has filed a complaint to Canadian regulators over plans by local telco, Shaw Cable, to charge a C$10 ($8.60) a month premium to customers of VoIP service. The charge ostensibly covers to cost of providing a higher quality connection to VOIP (Voice over Internet Protocol) users. Vonage describes the levy as a "thinly veiled" VoIP tax.

By using internet connections to make long-distance calls instead of conventional voice circuits users have the potential to make far cheaper calls. Vonage argues Shaw's fee undermines the healthy development of the market.

"Shaw's VoIP tax is an unfair attempt to drive up the price of competing VoIP services to protect its own high-priced service," Joe Parent, vice-president of marketing for Vonage Canada told CBS. The fee kicks kicks in when Vonage customers use net connections supplied by Shaw Cable, which operates in western Canada. Shaw Cable is yet to comment on Vonage's complaint to regulators.

Legal expert Michael Geist provides a detailed analysis of Vonage's complaint here. ®

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