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Optical/IP

FCC's Powell: Let VOIP Be

On Monday, Federal Communications Commission (FCC) Chairman Michael Powell made clear his position on voice-over-IP regulation at the first public VOIP Forum meeting in Washington D.C.: He wants nothing to do with it.

"I have heard nothing today to dissuade me that this can’t be solved by free-market protections," he said.

Powell’s remarks were part of a day-long forum arranged by the FCC to kick off its long-awaited ruling on VOIP, expected early next year. The issue has been a lightning rod for debate in recent weeks, as several states have attempted to regulate the new technology as a traditional telephone service.

Addressing this issue, Powell asked: "Does VOIP look like a duck and quack like a duck because you [the service providers] chose to create it that way -- or can it be made to look like a fish?"

No, Chairman Powell isn’t talking about an episode of Sesame Street. [Ed. note: Although Big Bird might do a better job of explaining this stuff!] He is trying to address the issue at the heart of the debate over regulating VOIP services, namely whether or not these services should be regulated like traditional telephone services. "We don’t want to regulate it on how it looks," he said.

Last month, a federal judge in Minnesota overturned the state's attempt to regulate VOIP service, ruling that treating VOIP as a telecommunications service is "not permissible because of the recognizable congressional intent to leave the Internet and information services largely unregulated" (see Qwest Jumps Into VOIP Hotbed).

That said, everyone at the meeting agreed that VOIP services are at a tipping point, and that there needs to be some clarity around these services so that consumers know what they are signing up for.

Following the Chairman's comments, the other four FCC Commissioners weighed in with their suggestions. All were concerned with how VOIP services should be regulated with regard to the Universal Service Fund, a $6 billion federal program funded by telephone charges that subsidizes phone services in rural areas and Internet service for schools.

According to California public utility commissioner Carl Wood, almost half of the funding that currently supports the Universal Service Fund will be lost due to VOIP services by 2008.

The Commissioners are also worried that many VOIP services do not provide support for 911 emergency calling, CALEA (Communications Assistance to Law Enforcement Act), and other homeland security provisions.

"These question marks have haunted VOIP for too long," said Commissioner Michael Copps.

"We must protect universal service, and public safety is not negotiable," said Commissioner Jonathan Adelstein.

The debate (available via Webcast) continued for most of the afternoon, with more political soapbox speeches. According to sources at the meeting, it seems most of the so-called experts are in agreement that a "light touch" approach to regulating VOIP is the best way forward.

"The same 'light touch' regulation should be applied to all VOIP providers. There is no evidence of a monopoly power in this market that would call out for regulation," said Tom Evslin, CEO of ITXC Corp. (Nasdaq: ITXC).

Others raised the point that not all VOIP services are created equal, and they should be regulated accordingly. Kevin Werbach, founder of Supernova Group, provided a shopping list of different technologies that offer VOIP as a slice of services including handheld PDAs, Web cameras, Yahoo! Messenger, push-to-talk services, and Microsoft’s Xbox online gaming service.

"911 support doesn't need to be applied to online gaming" he scoffed. "Help, I’ve been stabbed by an orc!"

— Jo Maitland, Senior Editor, Boardwatch

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dogmeat 12/4/2012 | 11:12:39 PM
re: FCC's Powell: Let VOIP Be I'd hate to be in local government and depend on PSTN taxes to fund things.

I have a DS3 terminating PSTN onto my corporate campus. The way it looks, at present, is I can pull in a UUNET DS3 with a "black box" (that converts the PRI's to an IP stream) and leverages IP-PSTN gateways inside UUNET to connect to the outside world. By making this transport change, my corporation avoids all Telecomm taxation since VoIP is just a stream of little tiny e-mails and isn't really voice.

Anyone have an idea of what other taxes and fees I'm avoiding also?
materialgirl 12/4/2012 | 11:12:38 PM
re: FCC's Powell: Let VOIP Be Tax, smax. WHY TIE TAX TO TECHNOLOGY? They are separate questions. If you tie a duck to a fish, you get something wierd. Your city needs money. Its telecom tax base is going away to a new technology. So, tax something else, like power or gas or real estate or something. DONT SUBSIDIZE A UNCOMPETITIVE INDUSTRY JUST BECAUSE YOU ARE TOO LAZY, OR TOO WELL PAID OFF, TO ADJUST TO REALITY.

Same goes for safety (not your issue, but one in the text). If you want to feel safe, hire cops. Why tie safety to E911? The folks who work at it want it, but I don't. I think its a scam. Your city pays for those call centers, the thing that matters, not the phone company. The phone company just connects the call. A cell phone does better for that than a land line anyway. IF you want to feel safe, make sure E911 cell phone calls get through, but dont' use safety as an excuse to subsidize a multi-billion dollar dead industry. Get real.

Same for homeland security. Let them figure out how to operate in the new reality instead of forcing an expensive dead industry on the rest of us because they are too dumb to adjust.

I have not been a Powell fan, but on this I say "Go Powell Go!"

BobbyMax 12/4/2012 | 11:12:34 PM
re: FCC's Powell: Let VOIP Be In spite of enormous push by the VOIP equipment vendors, VOIP is not likely to gain any boost from the consumers and businesses. Service providers cannot afford the cost of maintaing two distnct infrastuctures for voice services. So far the time being softswitch and media gateway vendors have to fly kites. VOIP may have some impact in the Third World Countries but not anywhere else.
technonerd 12/4/2012 | 11:12:31 PM
re: FCC's Powell: Let VOIP Be I can personally assure you that major US, European and Asian service providers are looking to deploy these technologies in the near future. They are not doing it because they like new technology; they do it because they believe they will save money and create new revenue streams to further their business.

VoIP does and will continue to have the following market:

1. International calling because of tariff arbitrage.

2. Enterprise networks, in which the enterprise has the carrier manage VoIP rather than run its own inter-city traffic over its leased data lines. My question is whether the carriers won't simply cut the price for PCM long-distance instead.

3. Final nail in the coffin for residential and small biz CLECs, as ILECs offer (or claim to offer) VoIP which is unregulated. This won't work in the resi market though, because real VoIP needs broadband. I wouldn't put it past the ILECs to say that their resi PCM is VoIP, nor would it surprise me if the trade press swallowed the story.

But none of it will matter, because cellular will cannibalize resi voice regardless of the coding scheme. And when that happens, there's going to be a financial crisis within the RBOCs.
AAL5 12/4/2012 | 11:12:31 PM
re: FCC's Powell: Let VOIP Be Booby,

you are clearly delusional and living in denial. From your previous posts it is fairly evident that you are an avid hater of both VoIP and MPLS, is it because you are not familiar with these technologies and wish that the technologies that you are familiar with are not replaced so you can give the illusion of still being knowledgeable?

I can personally assure you that major US, European and Asian service providers are looking to deploy these technologies in the near future. They are not doing it because they like new technology; they do it because they believe they will save money and create new revenue streams to further their business.

But of coarse they are obviously wrong and you are right.

AAL5
aswath 12/4/2012 | 11:12:30 PM
re: FCC's Powell: Let VOIP Be I wouldn't put it past the ILECs to say that their resi PCM is VoIP

(With tongue firmly planted on the cheek)Ofcourse it is. The adaptor just happens to be in the Class 5 switch. Seriously though, if the regulations artificially create difference between technologies, people will twist the definitions to level the differences.
technonerd 12/4/2012 | 11:12:29 PM
re: FCC's Powell: Let VOIP Be Seriously though, if the regulations artificially create difference between technologies, people will twist the definitions to level the differences.
Why yes, of course. And there are no institutions out there that will provide a countervailing voice to say, "Hey, you're lying."

The trade press has long since been bought off by the vendors. The FCC has, to put it kindly, limited technical competence and questionable ethics. The vendors will tell any lies the market will bear. Wall Street is a megaphone as long as there's an underwriting fee involved, and Washington cares solely about campaign money.

So, yeah, if the RBOCs call say that their PCM is really VoIP so they can perpetuate a monopoly, I tend to think that any voices to the contrary will be lonely indeed.
materialgirl 12/4/2012 | 11:12:24 PM
re: FCC's Powell: Let VOIP Be Don't be so down, techno. Even Barnum said: "You can fool some of the people all of the time and all of the people some of the time, but you can't fool all of the people all of the time." Just keep talking. The truth will come out. Even Russia fell. Wall Street is morphing beyond recognition as we watch.
technonerd 12/4/2012 | 11:12:22 PM
re: FCC's Powell: Let VOIP Be Wall Street is morphing beyond recognition as we watch.
Nothing importtant has changed on Wall Street. Here's what happened: The investment banks, Silicon Valley companies and venture capitalists conspired with the big pension and mutual funds to fleece investors. The federal government was prepared to do nothing about it until the attorney general of New York stepped up and said hey wait a minute.

Then he was cowed into accepting piddling fines rather than real penalties. Merrill's fine, for example, was less than their office supply expenses for one year. And now they put more boilerplate disclosure language on their research reports, but investment banking revenues still pay the bills.

And whatever pays the bills calls the tune.
lastmile 12/4/2012 | 11:12:10 PM
re: FCC's Powell: Let VOIP Be VOIP has matured tremendously in quality and it is similar (and at times) better than POTS. The real question is when will the average consumer ditch POTS in favor of VOIP. Our Grand Ma's and Pa's know nothing about VOIP so for them POTS is their way of life. Some of them have a cell phone, yet they will never ditch POTS.
How about the majority of users? With a cell phone and a DSL/Cable for internet would people still subscribe to POTS with their hard earned money?
If they do they are stupid. It takes all sorts of fools (including me) to make the world.
The days of POTS are coming to an end.
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