VoIP providers say regulation hampers growth

US regulators can play an important role in the spread of VoIP services by showing the rest of the world that the best way to...

US regulators can play an important role in the spread of VoIP services by showing the rest of the world that the best way to encourage growth is by limiting regulation, said suppliers.

A consistent "light touch" approach on regulation in the US, EU and elsewhere will also help the technology grow, suppliers told a Federal Communications Commission (FCC) forum on global IP regulation in Washington.

Regulators in many nations are uncertain as to how to regulate VoIP services, said Jonathan Draluck, vice-president of business affairs and general counsel for service provider iBasis.

"The US has had a light regulatory touch and this has fueled, more than anything, the innovation and the growth of this industry," Draluck said.

The six supplier represented at Friday's forum seemed united in their call for a largely hands-off approach to regulating VoIP, as opposed to the heavy regulations that traditional telephone carriers still face.

If cable companies gave priority to their own VoIP packets over competitors' products, providers may petition the FCC to step in, said Jeff Pulver, president and chief executive officer of Pulver.com, provider of the Free World Dialup VoIP service.

"If cable operators or other operators are discriminating against traffic, such that not every packet is the same type of packet - if that could be proven, that's a problem," Pulver said. "We need to have equal and fair access. Right now it's not regulated, it's just assumed that everybody plays fair."

But Pulver also criticised amendments to a US Senate bill intended to keep VoIP free of most regulation.

In July, the Senate Commerce, Science and Transportation Committee approved the VoIP Regulatory Freedom Act, but amended it to allow states to require VoIP applications to provide emergency services and to require VoIP providers to contribute to state universal service programmes and to pay intrastate access charges to other telecom providers.

The amendment allowing states to collect universal service fees and access charges on voice services over IP networks could allow them to collect fees on online chat features in console-based gaming systems, such as Microsoft's Xbox Live.

Pulver is worried that the committee's action, along with debates in the EU and elsewhere, may open VoIP up to "arcane telecom regulations".

In February, Pulver won an FCC order that designated his computer-to-computer Free World Dialup service as an unregulated information service.

He said he would oppose the VoIP Regulatory Freedom Act because the amendments run counter to the FCC's Pulver order.

He predicted that the next two years would be a pivotal time for the future of VoIP as US regulators decide what rules apply to the service.

Others, including lawmakers from rural states and the US Department of Justice, have pushed for some regulations for VoIP.

Some rural-state lawmakers want it to contribute to the Universal Service Fund, which helps to fund telecom services in rural and poor areas, and law enforcement officials want wiretap regulations to apply to VoIP calls as well as traditional telephone calls.

Some traditional telephone carriers say VoIP should face the same regulations as they do.

But panelists argued that old telecom regulations do not make sense for IP services, where state or national borders are erased.

VoIP has the potential to break down both national boundaries and those between devices such as PCs, PDAs and telephones, and traditional ways of regulating those devices no longer apply, said Al Safarikas, vice-president of wireline networks for Nortel Networks.

"The world's innovators are working on devices that we probably can't think of in this room in 100 years," he said. "IP will enable that, and all those boundaries will come down. [Regulatory] limits and boundaries are broken by technology."

VoIP providers are looking for consistent regulations throughout the world with certainty about what regulations they will face, said Kristen Neller Verderame, vice-president for US regulation and government relations at British Telecom Americas. She advocated that nations "regulate where it's necessary, and only when it's necessary".

But US debates about regulations such as access costs - what prices competitors have to pay to gain access to US broadband providers' networks - are a major concern to BT, she said.

She called on the FCC to give VoIP "reasonable access costs", even as the FCC in the past year has moved away from regulations that require the incumbent owners of the US telecommunications networks to share much of their networks with competitors.

Since February, the FCC has been working on a policy for VoIP regulation.

"Regulatory uncertainty is a huge barrier," Neller Verderame said. "Look at the market, see where it's competitive, and see where it's not. Where it is needed, do the regulation."

Grant Gross writes for IDG News Service


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