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Legislative of voice-over-IP telephony services


Vonage In Print News

Feds Weigh Role In Net Telephony

July 8, 2004

By Michael Grebb

As Congress braces for a comprehensive overhaul of the 1996 Telecommunications Act next year, a House subcommittee on Wednesday debated whether it should first warm up its legislative chops on voice-over-IP telephony services.

The hearing of the House Subcommittee on Telecommunications and the Internet highlighted the varied mix of Voip providers, which include companies that sell only Voip as well as some cable firms and other traditional telecommunications services.

issue is whether Congress should pre-empt state regulation of Voip and, if so, how the federal government can devise safeguards to protect public safety and sustain social goals such as keeping telecom services affordable in rural areas.

Voip services digitize and break voice telephone calls into packets. Companies ranging from startups to industry giants like AT&T now offer Voip to customers, who often pay a flat monthly fee no matter how long they talk or how far away they call.

Some states -- such as California, New York and Minnesota --have already tried to enact rules for Voip that are not consistent with each other. Industry players and some lawmakers fear more states will soon follow, creating a patchwork of confusing regulations that could stunt VOIP's growth.

"I think if they did that, they would kill it," said Rep. Chip Pickering (R-Mississippi), the sponsor of HR4129, or The Voip Regulatory Freedom Act of 2004.

The Senate companion bill, SB2281, is sponsored by Sen. John Sununu (R-New Hampshire).

In addition, earlier this week Reps. Cliff Stearns (R-Florida) and Rick Boucher (D-Virginia) weighed in with legislation that would bolster "advanced Internet communications services" such as Voip by giving the FCC sole authority, effectively shutting out the states.

The concept has powerful backers: During the hearing, House Commerce Committee chairman Joe Barton (R-Texas) and subcommittee chairman Fred Upton (R-Michigan) said they also favor state pre-emption.

"Ultimately, there has to be one final arbitrator," Barton said. "It seems to be an absolute no-brainer that it should be a national statute."

Some Voip providers even said state meddling could derail the fragile rebound of telecom companies following the 2000 crash.

"This resurgence is already in jeopardy," said Jeffrey Citron, chairman and CEO of Voip provider Vonage.

State regulators and some rural telephone companies, on the other hand, argue that states are best able to dissect regional telecom nuances. State consumer-protection offices that now field complaints from telephone customers would have to direct Voip customers to a federal agency under a pre-emption scheme, say the state-control advocates. The result could be even more consumer frustration.

"Distant federal agencies would be hard-pressed to handle this case load," said Robert Nelson of the Michigan Public Service Commission and chairman of the National Association of Regulatory Utility Commissioners.

Another key question for lawmakers is whether to push through narrow legislation this year to pre-empt the states while delaying action on numerous tough issues surrounding VOIP.

Those issues include how to reform the system of subsidies to rural areas, apply enhanced 911 services for VOIP, ensure Voip compliance with federal wiretapping rules and reform the system of "access charges" -- the complicated method by which phone companies pay to terminate each other's calls.

As if that wasn't complicated enough, such issues are set against the backdrop of next year's planned comprehensive rewrite of the 1996 Telecommunications Act, which will tackle the entire lexicon of Internet- and telecom-related services.

"(It) will take a minimum of three years ... to get comprehensive reform," said Pickering. "That gives us grave urgency to get to where we have consensus (on VOIP). If we wait, it will be three years. And the market and the technology will not wait that long."

Of course, it's unclear how the FCC would handle Voip at the federal level.

In February, the agency proposed only "minimal regulation" over Voip and in a separate action issued a "declaratory ruling" that one Voip service, Pulver.com's FreeWorld Dialup, could remain effectively unregulated as an "information service."

But in April, the FCC denied a request by AT&T to exempt any traffic that used Voip for a portion of the call from access charges. With AT&T's flavor of VOIP, however, calls were still beginning and ending on the traditional phone network.

At the hearing, Jeffrey Carlisle, senior deputy bureau chief of the FCC's Wireline Competition Bureau, testified that the agency would most likely continue to consider the different kinds of Voip when enacting rules -- no matter what terminology is used to classify the service itself.
"We should not get trapped in the definitional fight," he said, adding that Voip will require a "higher level of nuance."



 
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1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

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HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

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