More VoIP variables

Even as the Federal Communication Commision conducts its very public debate over whether to regulate IP phone services, two lesser known issues have emerged that could have a big impact on availability of VoIP offerings from the RBOCs.

Even as the Federal Communication Commision conducts its very public debate over whether to regulate IP phone services, two lesser known issues have emerged that could have a big impact on availability of VoIP offerings from the RBOCs.

The first issue involves regulators in a handful of southern states that are forcing BellSouth to make DSL broadband Internet access available to competitors’ voice customers. This undercuts an RBOC strategy to retain primary access line revenue by making VoIP available exclusively to those customers who buy its voice/DSL bundle.

The second issue has to do with whether regulators will force the Bells to provide VoIP links into customer premises to competitors at or below wholesale rates if those links are connected to Class 5 switches or other regulated equipment deeper in the carrier network. Such a policy, which already exists for TDM-based copper loops, could discourage the Bells from rolling out VoIP because of an unfavorable return on investment.

Both situations come at a critical time for VoIP. While the RBOCs plot their imminent service rollouts , the FCC is trying to determine whether VoIP should be regulated like current circuit-based voice services or be treated as an unregulated Internet service, like e-mail.

The BellSouth DSL unbundling rulings by Georgia, Kentucky and Louisiana in particular could negatively impact the growth of the Bell’s broadband and VoIP services, which are key to its ability to retain customers and access lines. If enforced, the Bells would see faster primary line substitution as broadband telephony from AT&T, Vonage and others takes hold, analysts say. RBOC competitors entitled to lease the Bells’ access facilities under the Telecom Act of 1996’s Unbundled Network Element-Platform (UNE-P) provisions would also improve their competitive position.

 BellSouth says it is disappointed in the states’ DSL unbundling ruling and has petitioned the FCC to halt the states’ requirement that it unbundle DSL. BellSouth competitor MCI  says the RBOC is engaging in monopolistic practices by requiring customers to subscribe to voice as a prerequisite for DSL.

The Telecommunications Industry Association (TIA) has not taken a position on BellSouth’s petition to the FCC regarding DSL unbundling. But the TIA has come out publicly in support of DSL as an interstate information service exempt from state regulation, which could pre-empt the states’ rulings.

In the meantime, the Bells may face another unbundling-related challenge to their VoIP plans.

Observers say that if a Bell uses its current provisioning, billing and customer care systems – all of the IT and back-end support systems that were developed by the regulated carrier and paid for with regulated dollars – to offer an unregulated service like VoIP, competitors may charge that the IP link into the customer premises should be unbundled and offered to them, a la UNE-P. If a VoIP service includes an IP interface from the customer premises to a Class 5 switch and relies on existing PSTN-based infrastructure for routing and service, it is not a new, unregulated service, says Timothy Jasionowski , an independent telecom consultant and former director of VoIP product management at Qwest.

“We’ve just put lipstick on the pig,” Jasionowski says.

The FCC says it has not yet addressed this issue.