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Cable Industry Lobbies For Quick, Limited
VoIP Rules
NCTA, MSOs Press FCC And Congress For
March 1,
2004
By Alan Breznick
Eager to get cracking in the
Voice-over-Internet-Protocol (VoIP) market after years of delays, the cable
industry is pressing federal policymakers to impose just a bare bones set of
national regulations on IP telephony players and fend off any pesky state
regulatory mandates.
In a 39-page policy paper issued early last month,
the National Cable & Telecommunications Association (NCTA) urged the FCC to
apply only "the lightest possible regulation" to the VoIP business and treat it
similar to an unregulated information service. "Only a regulatory framework that
is minimally burdensome can create the right incentives and a favorable climate
in which service providers can invest, innovate and deploy VoIP services," NCTA
said.
Hoping to curry favor in Washington, cable leaders volunteered to
comply with such traditional phone requirements as support for E911 emergency
services, the universal service subsidy fund, law enforcement tracking of
criminals, access for the disabled, intercarrier compensation and general
consumer protections. In exchange, they asked for benefits not usually granted
to unregulated information service providers, such as mandatory access to
telephone poles and utility ducts, conduits and rights-of-way.
The novel
NCTA white paper, entitled "Balancing Responsibilities and Rights: A Regulatory
Model for Facilities-Based VoIP Competition," also spells out certain other
"rights" that VoIP providers should receive, no matter how the technology ends
up being regulated. The list includes access to other carriers' phone numbers,
listing of their numbers in phone books, compensation for the exchange of voice
traffic and the ability to receive universal service fund subsidies, among other
things.
"Protecting VoIP services from unnecessary regulation does not
require that important public policies be neglected," NCTA said. "But the
overall direction of public policy should be toward a deregulatory environment
in which even the most vital public policy objectives are secured through the
lightest possible regulation, so as not to forestall the many benefits of these
new services."
Cable industry leaders unveiled the white paper just two
weeks before the FCC, as expected, launched its much-awaited regulatory
rule-making on VoIP services. In an unanimous decision, the Commission voted to
start the formal, months-long rulemaking process on Feb. 12. Whatever
regulations are eventually drafted by the agency will cover cable operators,
phone companies, such independent VoIP providers as Vonage Holdings Corp. and
other firms that try to charge fees for routing calls over IP networks and
exchanging traffic with traditional phone carriers.
Besides
seeking a light regulatory touch, cable officials are also urging federal
regulators and lawmakers to adopt the new VoIP rules quickly. In addition,
industry leaders are seeking a stable "regulatory roadmap" that removes any
uncertainties blocking swift IP telephony deployment.
"As voice-over-IP
services are introduced, there is a need for a regulatory structure that
encourages and promotes investment in this new technology," Time Warner
Chairman/CEO Glenn Britt told the Senate Commerce Committee in a hearing late
last month. "We think the time for doing that is now."
Federal
regulators largely agree. FCC Chairman Michael Powell has repeatedly stated that
the federal government and the states should tread lightly on most VoIP
regulation, except for such social and public safety areas as E911 calls,
universal service, law enforcement wiretapping and access for people with
disabilities. He warns that more heavy-handed regulation could hamper the
rollout of IP telephony before the technology has a chance to pick up steam.
"If the consumer stands to benefit significantly from Internet voice, we
should let it blossom," Powell told a National Press Club luncheon audience in
Washington in mid-January. "The burden should be placed squarely on government
to demonstrate why regulation is needed, rather than on innovators to explain
why it is not."
In a clear sign of Powell's deregulatory leanings, the
FCC immediately exempted some IP phone calls from federal and state regulation
at its Feb. 12 meeting. By a 3-2 vote that split along partisan lines, the
Commission declared that free VoIP services which don't engage the public
switched telephone network (PSTN) qualify as unregulated information services.
The ruling covers such free services as Pulver.com's Free World Dialup (FWD)
offering and Skype, which enable phone calls between computers with Internet
connections.
"IP-enabled services, such as Pulver's FWD and other
Internet applications like it, promise significant benefits in the form of lower
prices and enhanced functionality for American consumers," the FCC said in a
news release after the vote. "Additionally, these IP-enabled services will
encourage more consumers to demand broadband service."
But the
Pulver.com ruling doesn't necessarily mean that the FCC will spare other VoIP
services. In its declaratory ruling, the Commission emphasized that the decision
reflected only the particulars of Pulver's case.
Moreover, the fracas
over how the feds should regulate VoIP services has only just begun. Local phone
companies, state regulators and members of Congress are pressing the FCC to make
sure that VoIP providers won't be able to use their potentially deregulated
status to skirt universal service fund fees, access charges and other standard
requirements.
For instance, Sen. Ted Stevens (R-Alaska) is drafting a
bill to require cable operators to contribute broadband, and potentially VoIP,
revenues to the universal service subsidy fund. In the Senate Commerce Committee
hearing at which Britt testified, Sen. Byron Dorgan (D-N.D.) termed it
"critically important" that VoIP providers contribute revenue to the universal
service fund so that rural phone rates don't soar.
Mindful of these
pressures, cable leaders are stressing that they will support E911, universal
service, law enforcement tracking and the other public interest programs. In his
Senate testimony, for example, Britt said he supports making these programs
mandatory for all VoIP providers. "We think we should retain requirements that
pertain to these very important social policies," he said.
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