VoIP regulations test nations around the globe

Why the Europeans look to have telecom regulation right.

Governments around the world are wrestling with the impact of VoIP on telecom regulation. Some treat VoIP as just another way to deliver telephony services (and subject to all the taxes and regulatory constraints of legacy voice). Others view it as an emerging technology that has to be carefully nurtured, and therefore protected from taxes and regulatory constraints.

At the moment, the U.S. government seems to be leaning toward the "just another way to deliver telephony" perspective. As I pointed out last week, the FCC is looking to apply Universal Service Fund taxes to VoIP. The courts have similarly decided recently that VoIP is covered under the Communications Assistance for Law Enforcement Act (CALEA) - meaning that providers such as Vonage and Skype need to provide wiretapping hooks like those from AT&T, BellSouth and Verizon. And the U.S. House of Representatives just passed the "Communications Opportunity, Promotion, and Enhancement (COPE) Act of 2006" (H.R. 5252), stipulating that VoIP providers must ensure that 911 and E-911 services are provided to VoIP subscribers.

Overseas, however, the situation is decidedly more mixed. Although VoIP remains officially banned in China, word on the street is that the Chinese are planning to rethink their strategy, possibly as early as this year. (No word on whether the Chinese equivalent of CALEA will apply.) And while Russia just moved to regulate VoIP, the Philippine and Indian governments have taken steps to loosen VoIP regulations.

But the folks who are furthest ahead are the Europeans. Earlier this month, the heads of some 30 of the largest formerly state-owned telcos asked the EU Information Commissioner to level the playing field by - get this - lifting the regulatory burden imposed on incumbents, rather than introducing more regulation for new players. What a novel concept: Deregulate all of telecom, not just VoIP!

In fact, the EU is most of the way through a process initiated late last year to review the overall regulatory framework for telecom services and plans a formal proposal to the European Parliament by July.

My 2 cents? The Europeans are right on. Yeah, I know it's politically incorrect to say anything even remotely positive about those cheese-eaters across the pond.

But really, folks: It's stupid to impose outdated regulatory constraints on disruptive technologies such as VoIP. And it's even stupider to have governments in the business of picking and choosing technology winners by exempting some, but not all, from regulation.

I've said it before, and I'll repeat it here: What the United States needs to do is launch a complete soup-to-nuts overhaul of its communications regulatory framework, including spectrum allocation, peering arrangements and emerging services, such as VoIP and presence. And we need to pay special attention to issues such as privacy, universal access and emergency services - because what we're doing today isn't working.

Johnson is president and chief research officer at Nemertes Research, an independent technology research firm. She can be reached at johna@nemertes.com.

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