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VOIP Seeks Its FCC Level

Light Reading
News Analysis
Light Reading
3/29/2004

The regulatory status of voice over IP (VOIP) is still undecided, even after one service's victory with the Federal Communications Commission (FCC), according to speakers at the Voice Over the Net (VON) conference.

Kicking off a day-long session [ed. note: a mighty long session, that] on policy and regulation, speakers reiterated the argument that VOIP is fundamentally different from telephone service and should be regulated differently.

The FCC has agreed -- for now. VOIP service Free World Dialup (FWD) was granted a February petition to be considered a data service rather than a telecommunications service (see VOIP to Star at FCC ). That puts FWD, and anything looking just like it, under Title I regulation for information services, as opposed to the more restrictive Title II for telephone service. (FWD is offered by Pulver.com, the same company that organizes VON).

But that's no reason for proponents of easily accessible VOIP to celebrate yet, said Blair Levin, managing director of Legg Mason Inc. who was chief of staff to former FCC commissioner Reed Hundt. "The decision to deregulate a service that has never been regulated is not significant," Levin said. "In my view, the game hasn't actually started yet."

The key is that FWD is new. Had a similar proposal been submitted by Microsoft Corp. (Nasdaq: MSFT), it would have gotten deeper scrutiny, Levin said.

The long-run fate of VOIP is still to be decided, primarily because it's tied up with the finances of the old telephone network. Telecommunications revenues foot the bill for 911 service and help fund rural access, and how those items are affected in a VOIP world is a complicated issue.

Part of the FCC's challenge is this "Title" setup, where different services are regulated according to strict and neat definitions. VOIP is difficult to squeeze into any established category, and the fit gets more difficult if one considers VOIP to encompass general IP multimedia services, not just a phone call (and one does).

Indeed, the definition of VOIP is amorphous, judging by the pending petitions described by Julie Veach, assistant chief of the FCC's wireline competition bureau. AT&T Corp. (NYSE: T) has asked immunity from federal access charges for a service that uses the public switched telephone network (PSTN) on either end but routes the calls through an IP core. Level 3 Communications Inc. (Nasdaq: LVLT) has asked for forbearance -- in other words, an exception from Title II rules -- for services that involve an IP device on one end and a PSTN telephone on the other. And SBC Communications Inc. (NYSE: SBC) has asked for forbearance on IP services in general.

"We like to get the lawyers around the table and play this incredibly long game of 'In Which Box Does This Fit?' " said Kathryn Brown, vice president of policy development for Verizon Communications Inc. (NYSE: VZ) and former chief of staff to Hundt's successor, William Kennard. "People want to stick [VOIP] in its definitional silo: It's voice, therefore it must be a telephone service. Well, it's not. It's an application."

— Craig Matsumoto, Senior Editor, Light Reading

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mr zippy
mr zippy
12/5/2012 | 2:09:11 AM
re: VOIP Seeks Its FCC Level
A lot of the argument for regulation, or in the context of regulation, seems to be based on the assumption that the network provides both the transport and the application. Of course, in the old Telco world, this was the case - the network was designed for one application - voice - which created a merged transport / application mind set.

The Internet or rather, IP networks, separates transport from the applications. The applications only exist at the edges, having only been deployed at the end points.

As is starting to happen in peer-to-peer type file sharing applications, to avoid groups like RIAA, if VoIP gets too regulated (which may include being regulated at all), techniques such as port hopping and encryption will be incorporated, such that a VoIP call will not be able to be identified within the network. Any regulation will be moot.

technonerd
technonerd
12/5/2012 | 2:09:09 AM
re: VOIP Seeks Its FCC Level
The FCC would like to leave VoIP alone, i.e., uphold the RBOCs in their desire to have it classified as an information service. This will kill what little remains of the Telecom Act of '96. In retrospect, the only thing that law did was allow the California venture capitalists and their partners in crime -- corrupt securities firms and lying managers -- to launch of fraud of gargantuan proportions.

None of the principals ever cared about telecom or about competition or generating returns on investments. It was all about fraud, and it still is. I predict that VoIP will indeed be classified as an information service, and that the RBOCs will wind up using the loophole to redefine all voice service as "information service," therefore evading any duty to open their networks to competitors.

Oh, and the traffic will run through Class 5 big iron as it always did. The trade press won't say a word about it, either.
aswath
aswath
12/5/2012 | 2:09:08 AM
re: VOIP Seeks Its FCC Level
Of course, in the old Telco world, this was the case - the network was designed for one application - voice - which created a merged transport/application mind set.

The network was originally designed and optimized for a single application, but later on additional applications (fax and data) were accommodated. Even though the general perception is PSTN has a single application perspective, in my view the regulation does not have merged transport/application mind set. Some of the regulations apply to any call that uses the switched network (transport); some regulations are application specific (unsolicited voice calls are not allowed; I think junk fax calls are still permissible). In mid 90Gs when the Bells wanted to impose Gǣmodem taxGǥ, the general public and subsequently the regulatory agencies rejected the proposal.

Any regulation will be moot.

I am not ready to give up on regulating VoIP. When it interconnects to PSTN, I hope VoIP calls are regulated appropriately, otherwise GǣDo not call listGǥ can not be enforced. I also hope VoIP subscribers are protected.
dljvjbsl
dljvjbsl
12/5/2012 | 2:09:04 AM
re: VOIP Seeks Its FCC Level

Oh, and the traffic will run through Class 5 big iron as it always did.


There have been many generations of class 5 local access switches. Why do you think that the last generation which was created in the 1970s with 1970s technology to 1970s needs is the ultimate statement in this technology? The developments in wireless and data technology since in last 25 to 30 years seems to indicate that something quite different is more appropriate today.

What is so particularly capable about 1970s technology which means that no development in the last 30 years can surpass it?

Given that the vendors and carriers seem to be abandoning this model (e.g. Nortel has laid off most if not all of DMS, enterprise companies are exclusively developing IP equipment, the carriers are implementing IP cores and abandoing TDM technology), the conspiracy to fool the regulators in the US seems to be a very extensive and expensive one.
materialgirl
materialgirl
12/5/2012 | 2:08:59 AM
re: VOIP Seeks Its FCC Level
Its all about the money. The incumbents face a new product with which they cannot compete. It works great and costs 1/10 of their costs. To users it is free, however, that transport costs SOMETHING to SOMEONE. That someone is losing money, but that is another matter.

VoIP certainly does not cost the $60/month my phone lines cost, however. But, without the high voice prices and those taxes appended to your phone bill, who will fund your municipality? (Thats a joke). Who will pay POOR Ed Whitacre his $25M/yr? He NEEDS it after all. How could he show up at the golf course on only $1M/yr?

So, to keep getting your money, they use the ruse of 911 and TERRORISTS to scare you into shelling out your dough. I, for one, do not need either their 911 nor their universal service. Does ANYONE think country folk get good service from the universal service fund? Rural folks all have to use co-ops to get anything, and the RBOCs are real busy selling their rural lines as we speak. I live in the sticks, get terrible voice service, and get internet service over WiFi. A hiker stranded on a cliff near here could not raise anyone on 911, however a satellite phone saved his life. Let ME keep the money and buy services I need.

Nor am I breathless over the FBI's ability to listen to my calls. I guess they think terrorists don't use IM.

Its all a sham to keep your money so the CEO gets millions of dollars a year. Don't buy it. Bye Bye circuit switched voice. Hello tomorrow, and don't pigeon hole it into an old catetory. It is new and does not fit into 1900s thinking. Nor to its economics.

The phone company assets have been paid for over and over by our high, regulated prices. We should own them by now, and decide what it costs to connect. Face it, circuit switched voice is ending as a business for any number of reasons. We should not keep it alive via subsidies from a new, growing, replacement.
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