Lawmakers and regulators have long congratulated themselves for keeping their mitts off the Internet and letting the newest medium thrive freely. But now, as the Internet becomes an avenue not only for new modes of communication—such as e-mail and instant messaging—but also for the old mode of voice calling, the FCC is beginning to ponder regulatory proposals.
Voice Over Internet Protocol, still a nascent technology, is shaking up the long-entrenched regulatory regime for telephony. While it is sometimes viewed as a substitute for traditional telephone service, its underlying infrastructure is different. As telephone traffic migrates to IP networks, the move threatens to upset the intricate balance of compensation among telecom carriers as well as the subsidy system that ensures universally affordable local phone service in the United States.
VOIP providers, including start-ups like Vonage Holdings Inc., Pulver.com and long-distance carriers, are urging the FCC not to saddle VOIP services with the full panoply of common-carrier regulations that traditional telecom services are subject to.
"Our service runs more like more like a domain registry than a phone network," Jeff Pulver, president and CEO of Pulver.com, told the FCC at a Monday forum on VOIP. "Were coming to a time when voice will work pretty much like e-mail."
Others, including some state regulators, contend that if consumers are using VOIP in place of the traditional telephone network, then the service should have to comply with consumer protection and public-safety rules, including emergency 911 and wiretapping obligations. The California Public Utility Commission has concluded that VOIP is a telecom service, and the Minnesota Public Utility Commission earlier this year ordered Vonage to comply with its telephone rules, but a federal court enjoined enforcement of the order.
At the FCC forum Monday, Vonage CEO Jeffrey Citron warned that VOIP providers serve only about 100,000 lines today and that regulation would stifle further deployment. Additionally, he said VOIP regulation would spread to e-mail and instant messaging.
The National Telecommunications and Information Administration is pressing the FCC to avoid imposing regulations that would hamper the development and deployment of VOIP.
FCC Commissioner Michael Powell cautioned that the task before his agency will be a long, complicated one, but he praised the VOIP industry for its potential to improve communications.
"You here are the makings of a great American success story," Powell said.
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