[IP] Can VoIP survive Congress?
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: July 5, 2004 10:44:31 AM EDT
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] Can VoIP survive Congress?
Reply-To: dewayne@xxxxxxxxxxxxx
Can VoIP survive Congress?
By Declan McCullagh
<http://news.com.com/2010-1028-5256334.html>
Story last modified July 5, 2004, 4:00 AM PDT
Washington politicos are about to kick off what will be a long and
exhausting process aimed at deciding the future of phone calls made
over the Internet.
On Wednesday, a House of Representatives panel will convene its first
hearing devoted to considering how much of the thousands of pages of
weighty telecommunications regulations should be imported to cover
voice-over-Internet Protocol (VoIP) services. The apt title of the
hearing: "VoIP: Will the Technology Disrupt the Industry or Will
Regulation Disrupt the Technology?"
This is a process fraught with problems. For all the hype surrounding
VoIP, it remains a fledgling industry that could be severely--perhaps
even permanently--harmed if Congress veers in the wrong direction.
Early signals from Congress are mildly encouraging. Rep. Charles
Pickering, R- Miss., has introduced a bill prohibiting state regulators
from seizing control of VoIP services, which is a welcome first step.
But the measure also would impose a hefty stack of regulations,
including ones related to wiretapping and universal service, on
"connected" VoIP systems that offer the choice of calling people on the
existing telephone network.
Rick Boucher, D-Va., and Cliff Stearns, R-Fla., are planning a press
conference on Tuesday afternoon to announce a second House bill on
VoIP. Boucher told me that while the legislation won't be finalized
until the event, it has two major components: Blocking states from
regulating VoIP is one. The other is encouraging the Federal
Communications Commission to consider what 911, universal service, and
access charges requirements will apply.
In the Senate as well, politicians are divided on how to react to VoIP.
At a hearing last month, senators were skeptical of the Justice
Department's requests for broad new VoIP wiretapping powers. Others
insisted that the FCC must levy universal service taxes on VoIP calls,
with proceeds going to fund discounted analog phone service for
low-income and rural American households.
That's a big concern of state regulators, who say they fear losing tens
of millions of dollars--from fees and subsidies provided by telephone
companies--if more calls flow away from traditional phone networks and
onto the Internet. States such as Minnesota and New York already are
active in trying to seize authority over VoIP companies.
Recipe for disaster?
This is a classic Washington scenario that often heralds bad
legislation. When just about everyone wants something, they tend to be
willing to trade political favors for it. The Justice Department
conceivably could ink a deal to back universal service taxes on
VoIP--on the condition that certain senators drop their opposition to
new wiretapping requirements, and so on.
The danger is that either through ignorance or malice, politicians will
impose 20 th century regulations on a 21st century technology. A debate
expected in the next year over revising the Telecommunications Act
offers a convenient opportunity to do just that. Some of the leading
candidates for regulatory shoehorning are wiretapping requirements, 911
emergency service, disability access, universal service, and "access
fee" taxes.
These rules, most of which are laid out in excruciating detail in Title
II of the Telecommunications Act of 1934, may have had a place when the
Bell System was the only way to make a phone call. Extending them to
the Internet risks stifling the growth of a promising new technology
with a web of taxes, entitlements, and cross-industries designed for a
much earlier era.
Take "universal service," one of those rare taxes that enjoys
enthusiastic bipartisan support--in its modern form, it was invented by
a Republican Congress in the mid-1990s--and can be politically
dangerous for politicians to oppose. It totals about $6 billion a year.
Yet if 1998 analysis by Lawrence Gasman, head of a telecommunications
consultancy in Charlottesville, Va., concludes it can't be justified
even for analog telephone lines, why should it be renewed in the form
of higher taxes for VoIP users?
"We're directing the FCC to put the issue under the microscope and
figure out a reasonable way to have universal service apply to VoIP,"
Rep. Boucher said. "What we are saying is that the commission shall
apply universal service formulas to VoIP, and we leave it to the
commission to make a decision on how to do that." Boucher said his bill
would not prohibit the FCC from imposing universal service fees on
offerings such as Free World Dialup, Skype and instant messaging
programs that include voice chats.
A white paper released last month by the VON Coalition--which includes
Microsoft, MCI, Intel and Pulver.com--points out that VoIP providers
already "contribute to universal service either directly or indirectly"
when they link to the phone network. The report also stresses that
"phone companies are already fully compensated for their costs when
Internet phone calls are terminated on their networks," so there's also
no need to impose new access charge taxes. It concludes that imposing
regulations designed "for a 100-year-old telephone network on
innovative Internet communications services" may not make much sense.
Unfortunately, when Congress starts writing new telecommunications
laws, a dollop of common sense often doesn't go very far.
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