FCC Picks VOIP Experts
The build-up to this event feels like the telecom equivalent of the California re-election. It's got its own set of industry celebrities taking part, and each has just six minutes to present.
It’s going to be a lively day, analysts reckon. “The people involved are choosing their words very carefully,” says Jon Arnold, program leader for VOIP equipment at Frost & Sullivan.
The most controversial session of the day will determine how the FCC might distinguish between VOIP and other IP-enabled applications that enable communication (such as email, instant messaging, videoconferencing, and interactive online gaming).
Industry luminaries who have been invited to present include: Charles Giancarlo, Cisco Systems Inc. (Nasdaq: CSCO) SVP and general manager; Jeff Pulver, president and CEO of Pulver.com; John Hodulik, managing director of the communications group at UBS AG; John Billock, COO of Time Warner Cable; James Crowe, CEO of Level 3 Communications Inc. (Nasdaq: LVLT); Tom Evslin, CEO of ITXC Corp. (Nasdaq: ITXC); and Jeffrey Citron, CEO of Vonage Holdings Corp.
At issue is what, if any, regulatory obligations should be placed upon VOIP providers -- and whether from legal or technical perspectives such obligations are feasible. To date, VOIP providers have been excused from paying many of the taxes associated with telephone services. However, many of the state public utilities fear huge losses in subsidies from telephony taxes if swarms of people start to migrate to tax-free VOIP services (see Qwest Jumps Into VOIP Hotbed).
Alternatively, one analyst noted that many of the smaller VOIP-only providers, such as 8x8 Inc. (Nasdaq: EGHT), Free World Dialup (FWD), Voiceglo, VoicePulse, and others across the U.S. could be squashed in a heartbeat if the FCC decides to heavily regulate the service.
“Taxes levied on traditional services could in theory be applied to VOIP in the future, but this might push some of the little guys who can’t afford these taxes out of business,” says Diane Myers, VOIP analyst at Stratecast Partners.
Myers thinks VOIP carriers will likely pay some sort of access charges and will have to make contributions to the Universal Service Fund, but that ultimately, the most formidable challenges to VOIP deployment will come from "non-common carrier obligations related to law enforcement and public security," Myers says.
Her words are echoed in an investor note published today by Simon Leopold, VP of equity research in the telecommunications equipment group at Merrill Lynch & Co. Inc.. "We see issues concerning variation in powering phones, support for 911 and 411, law enforcement taps, and security against network viruses and intrusion," he says in the note.
— Jo Maitland, Senior Editor, Boardwatch