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VoIP: Who is really fighting it?

VoIP: Who is really fighting it?

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Vonage is getting a lot of coverage, I have seen the Vonage commercials flying on air several times during the holidays.  My mother asked me about Vonage, the true litmus test to me of when a technology has progressed past the blogosphere into the hands of actual consumers.  Consumer awareness, growing adoption rates... time to go to the courts to decide how to compete.  And recently one of the first attempts to regulate VoIP has failed:

The Dec. 22 order by the 8th U.S. Circuit Court of Appeals in St. Louis upholds a lower-court ruling and is a win for fledgling companies like Vonage Holdings Corp. of Edison, N.J., which provides Voice over Internet Protocol, or VoIP.

The Minnesota Public Utilities Commission had argued that VoIP companies were providing phone-like service and therefore should be regulated as phone companies are. But those businesses said they provide an information service rather than a telecommunications service.

In its two-page order, the 8th Circuit said the FCC rules back the lower court's ruling prohibiting the state from treating Internet-based services the same way as other telecommunications services.

The FCC ruling had been criticized by some consumer groups, who argued that state regulators should have regulatory power over VoIP service in order to guarantee safeguards such as making sure 911 calls work properly and rural subscribers aren't left out.

http://c.moreover.com/click/here.pl?r251854920

The plaintiff is named as the Minnesota Public Utilities Commission, but undoubdetdly this decision caught large amounts of interest from the wireline carriers themselves.  And with good reason.

Ma Bell is a regulated entity and continually fights to adhere to shifting federal and state legislation.  This almost seems like an unfair burden on the wireline carriers to provide a higher class of service than their VoIP counterparts.  Consider this article from Russell Shaw of ZDNet...

There’s a rural county in southeastern Tennessee called Sequatchie. About 12,000 people live there. Sloping hills, great canoeing.

When the small, rural jurisdiction gets standard "911" service within the next few months, Tennessee reportedly will be the only state with wired-line "911" capability in every county.

But, as this Associated Press piece points out, emergency responders in only one of those 95 counties, Dyer, will be able to track the phone number and address if the 911 call is made over the Internet.

http://c.moreover.com/click/here.pl?r250741955

VoIP regulation will be an interesting topic to watch during 2005. And I sincerely doubt that this is the end of a regulatory push against VoIP.. it only makes sense that the wireline carriers throw their hats into the ring and suit up for the fight as well.

  • I don't know if I'd say it places an "unfair burden on the wireline carriers". The main reason for this regulation was the fact that whomever owned the wires had a defacto monopoly. The companies running the lines were given subsidies and tax breaks, access to land, etc - and at that point consumers had only one choice - get phone service or not.

    It didn't matter how good the service was or how high the price.. consumers were stuck. No one else could afford to run lines to every house - the government wouldn't help - and therefore you had Ma Bell - Bell phones, Bell service, etc.

    Now VoIP is quite different. While still requiring some start-up costs, the natural monopoly isn't there. So, in theory at least, natural capital market forces will provide low-cost, high quality service.

    Personally, I don't think that wireline regulations should carry to wireless, nor VoIP. I think the FCC should have some very minimal regulation on VoIP, though - like 911 and bulk calling. But simply treating it as YAPS (yet another phone service) is siplistic and dangerously short-sighted.

    In the future, what's the difference between voice and data? If the FCC regulates VoIP, what then about Faxe over IP? Email next? Then IM? What makes voice data so different from any other?

    Before we let the FCC step in on this, I'd like to see some good answers to this. It's important to look at what's waiting at the bottom of the slope, before we slide down it.

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