The FCC’s decision last week to pull rank and establish federal control over VoIP telephone services was a good and necessary move that can only help spur the development and acceptance of the technology.
The FCC’s decision last week to pull rank and establish federal control over VoIP telephone services was a good and necessary move that can only help spur the development and acceptance of the technology.
FCC Chairman Michael Powell made good on his promise last month at the Voice on the Network show in Boston when he said it was “plain wrong to see VoIP through the lens of the old telecom model.” The first order of business was to relieve VoIP carriers from state-by-state regulation.
The commission was specifically ruling on a petition VoIP pioneer Vonage filed seeking federal preemption of regulations that the Minnesota Public Utilities Commission (PUC) was trying to impose.
In siding with Vonage, the FCC ruled that VoIP is not subject to traditional state PUC regulations: “This commission, not the state commissions, has the responsibility and obligation to decide whether certain regulations apply to IP-enabled services.”
The ruling is warranted because it is clear we are moving to a packet world and this will help spur the transition by making it easier for smaller, innovative players like Vonage to keep making progress. That progress will, in turn, pressure the large incumbents to respond in kind. Requiring VoIP players to deal with state regulations would simply throw a wet blanket on the movement.
There is work yet to be done on what responsibilities VoIP carriers will have to shoulder in terms of 911 services, universal service and even taxation, and the commission has promised to start addressing these in its IP-Enabled Services Proceeding.
The one danger, of course, is that large incumbents start calling everything VoIP in an attempt to sidestep current regulations and fees. But concerns about that are probably overstated because these same carriers have to worry about cannibalizing their revenue base.
Verizon, for example, now offers a broadband VoIP service called VoiceWing that costs $34.95 per month. If you use it with Verizon’s DSL the company discounts DSL to $29.95 per month, but you still have to pay $15 for an underlying line. That adds up to $80, which is only about $10 less expensive than Verizon’s regular DSL/unlimited calling package. There isn’t a lot of cost incentive to change, and undoubtedly that was the intention.
But VoiceWing positions Verizon for the future, and it can play the rate game when and if it needs to.
As Chairman Powell said at VON: “Some say there is a telephone net and the Internet. The FCC is saying, not for that much longer.”
