Level 3 Wary of VOIP Regulation

Issues over whether voice-over-IP (VOIP) services should be regulated in the same way as traditional telephone services reared their ugly heads today in an earnings conference call for Level 3 Communications Inc. (Nasdaq: LVLT).

Level 3 announced that it has swung to a positive cash-flow in its third quarter, but it warned that hurdles around VOIP regulation need to be settled swiftly and fairly in order for the market to blossom (see Level 3 Reports Q3 Loss). The company reported a net loss for the quarter of $247 million, or 38 cents a share, compared with a loss of $299 million, or 73 cents a share, a year earlier. Revenues totaled $874 million, in line with its recently reduced guidance, but below its year-ago revenues of $1.05 billion.

The company said it cut 380 positions, or 21 percent of the work force during the quarter, which helped it achieve the $40 million in cash flow against a year-ago $34 million outflow.

During its earnings call Thursday, one analyst raised concerns about potential VOIP regulations and how these might affect Level 3’s business going forward.

Get the full story on Boardwatch.

— Jo Maitland, Senior Editor, Boardwatch

telebud 12/4/2012 | 11:19:15 PM
re: Level 3 Wary of VOIP Regulation Regulators are especially concerned that some companies do not offer reliable 911 service.

``What happens if a 15-year-old is using a VoIP phone,'' Mickiewicz said, ``and fire breaks out and the kid can't call 911? Who's going to get the blame? People will be saying, `Why weren't they regulated?' ''

>>this is LIKE totally stupid..
LIKE you think CELL PHONES are going to disappear
or something?
Even my grandma has a cell phone.
>>sounds like a government beurocrat that would
use some argument like 911 calls.
>>Gov wants regulation because they want to
tax VOIP calls.
>>States like Calif are in the battle too they
also want piece of action.

aswath 12/4/2012 | 11:19:08 PM
re: Level 3 Wary of VOIP Regulation For those who advocate no regulation whatsoever on VoIP service providers, please consider an analogous situation: a start-up called Eclipse Aviation Corp. is building a twin-engine jet with the potential of upending the aviation industry - increase competition, reduce air fares, support small airports. Should they be regulated or be allowed to grow unfettered because it is a "disruptive technology" and going to benefit the consumers? For the record, Eclipse is working with FAA in developing appropriate regulations for these "airtaxis" and making sure that the pilots are properly trained, because they are "acutely aware of the damage that an untoward incident could do to a nascent airplane program".

telebud 12/4/2012 | 11:19:07 PM
re: Level 3 Wary of VOIP Regulation your talking apples and oranges.
When gov regulations make sense fot the public
safety that's one issue by it self.
When gov wants to strangle business with more regulations and pick consumer's pocketbooks that's something else.
Course we live in a 'FREE MARKET' place right?
If Edison were alive today and tried to invent
the light bulb we'd all be in the dark.
Sign In