US bill exempts some VoIP from regulation

Most voice-over-internet protocol (VoIP) services would be exempt from state taxes and regulations and be treated by the US...

Most voice-over-internet protocol (VoIP) services would be exempt from state taxes and regulations and be treated by the US government as a lightly regulated information service under legislation to be introduced this week.

A bill has been drafted defining most VoIP services as information services, such as other internet-related services, under congressional and US Federal Communications Commission (FCC) regulations.

The bill would exempt VoIP from most regulations governing traditional voice telecommunications, including federal law-enforcement wiretap regulations and access charges typically shared among telecom providers.

Legislation is necessary to give clarity to VoIP suppliers and customers, even though the FCC began a rule-making proceeding on VoIP in mid-February.

FCC chairman Michael Powell has also called for VoIP to be exempt from state regulations, but the legislation could help avoid the court battles that have followed other FCC telecommunications decisions, said senator John Sununu, who drafted the bill.

"The laws now really don't deal in a clear way with VoIP technology," Sununu said. "[The bill] pre-empted heavy-handed state regulation, and it even limits the FCC's role at this particular time."

Calls that start as traditional voice calls, are switched to an IP network, then terminate back on the traditional switched telephone network are not exempted from telecommunications regulations in Sununu's bill. Telecom companies such as AT&T are already experimenting with carrying some of their traditional voice calls over IP networks.

The bill is intended define VoIP service to narrowly and exempt it from regulation and taxes, Sununu said.

The bill, called the VoIP Regulatory Freedom Act, would direct the FCC to act within 180 days of its passage to work out an alternative plan for access fees and a flat-fee mechanism for collecting universal service fees, which are used to bring telecommunications services to poor or rural areas.

State regulators should be involved in consumer protection issues, such as whether VoIP services carry enhanced emergency features, said James Bradford Ramsay, general counsel for National Association of Regulatory Utility Commissioners (NARUC).

The FCC is not equipped to deal with VoIP customers calling to complain about issues such as service interruptions, while state public utilities commissions are, Ramsay said. "There's a consumer protection role the states are particularly suited to do," he added.

Grant Gross writes for IDG News Service

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