FCC attorney: VoIP rules could be tailored to players

LAS VEGAS – Much of the discussion at the U.S. Telecom Association conference here has centered on what the government should do about voice-over-Internet providers, which are currently unregulated. An FCC attorney yesterday said multiple sets of rules could develop, with each set tied to a specific category of provider.

Christopher Libertelli, senior legal advisor to FCC Chairman Michael Powell, speaking at a panel discussion, reminded attendees that VoIP providers offer services in three basic ways: via private networks; over networks that touch the PSTN; and via evolving peer-to-peer networks. Consequently, the commission could develop three different sets of rules individually tailored to each category.

"We might have different rules for the different flavors," Libertelli said.

VoIP critics want the category held to the same standards as other telcos that provide local services, which at the very least means they would be required to provide 911 services, pay access charges when they connect to the PSTN, and contribute to universal service. Last week, George Ford, chief economist for competitive carrier Z-Tel Communications, speaking at the Competitive Telecommunications Association conference in Orlando, called VoIP providers "the ultimate free riders."

Matthew Deatrick, vice president of retail sales for VoIP provider Vonage, speaking at an earlier USTA panel, said such characterizations are not only unfair, but also untrue. According to Deatrick, Vonage – which has 60,000 subscribers – already is paying access charges and into the universal service fund. "We’ve always paid," Deatrick said. "We recently started to break out these charges on customer bills so you would know that. It has been one of the big criticisms against us."

He added that the question concerning whether and how VoIP should be regulated already has been decided. "This will probably give you heartburn, but the FCC already has said that when voice turns into data, it’s data," Deatrick said. "You disagree because you want to regulate us out of existence. But the FCC has made clear what its position is."

Perhaps not. Libertelli said the commission would host a forum on VoIP next month as a precursor to the opening of a formal proceeding, which he predicted would occur sometime near the end of the year. He said it is likely the commission would open a Notice of Proposed Rulemaking (NPRM), as opposed to a Notice of Inquiry (NOI), in order to save time, as the FCC can only issue an order out of an NPRM. An NOI generally is used to determine whether an NPRM is necessary.

Incumbents see VoIP providers as a giant threat, with good reason. VoIP is a lower-priced alternative whose service quality and reliability is fast approaching carrier-class. More importantly, consumers are flocking to it. Deatrick told attendees that Vonage’s subscriber base doubles every 12 weeks. He predicted that the current 20 million broadband homes would double to 50 million by 2006, giving the company ample opportunity to convert more voice customers.