The VON Coalition has sent a letter to Arkansas legislators with the purpose of heading off state taxation of VoIP services. Ray wrote about it here; a follow-up is found here. While I've read the letter, I don't see it on their website and so a link will be forthcoming when available. Among other arguments, VON rightfully makes the point "VoIP transmissions are indistinguishable from other forms of data traffic - making voice traffic difficult to separate out from other e-mail and web surfing traffic for tax purposes." I particularly like VON's appeal to demand-side arguments regarding broadband. Nearly all policy proposals to increase broadband penetration focus exclusively on supply side effects. Not so with VON. This is good since understanding markets requires both sides of the equation.