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MagicJack Settles $5 Million FCC Investigation

The FCC said it has reached a $5 million settlement with VoIP phone provider magicJack for not reporting interstate revenues and contributing to the Universal Service Fund. 

The company also agreed to an extensive compliance plan.  

“Today’s settlement sends a strong message that we take seriously the requirements on VoIP service providers to meet their legal obligations,” said Chairman Ajit Pai. “I am glad we can resolve this long-standing investigation." 

Internet service providers don't have to contribute from their broadband revenues to the Universal Service Fund, but phone service providers, even if they use the internet to allow calls to and from traditional mobile phones and landlines, have to contribute to USF. 

The FCC pointed out that the company's service includes "traditional" phone services including caller ID, voicemail, call forwarding and 411 service.