Bells: FCC needs to take quick action on VoIP

While agreeing that a federal judge ruled correctly by declaring that the brand of voice-over-IP service provided by Edison, N.J.-based Vonage is an information service, both BellSouth and Verizon Communications said today that important questions still remain concerning the still nascent but fast-growing technology.

Judge Michael Davis of the U.S. District Court for Minnesota granted a permanent injunction last week that prevents the Minnesota Public Utility Commission from regulating VoIP as a telecommunications service. Such regulation could have subjected Vonage and other such providers to certain common carrier obligations, such as the provisioning of 911 services, contributing to the Universal Service Fund and paying access charges when they connect to the public switched telephone network. The Minnesota PUC tried to force Vonage into registering as a telco before allowing the company to provide service in the state.

On a micro level, the ruling will hurt the Bell companies, because it enables VoIP providers operating in Minnesota to avoid paying access charges, said BellSouth spokesman Bill McCloskey. "This business is built on access charges," he said, adding that the ruling isn’t binding in other districts.

However, on a macro level, the ruling underscored the need for the FCC to quickly resolve the issues concerning VoIP providers, McCloskey said. "As we heard at [last week’s] USTA show, this technology certainly is moving forward," he said. "We believe what Vonage does is an information service, but IP as a technology could be used in the provisioning of telecommunications services."

Verizon Communications spokesman Larry Plumb said the carrier believes VoIP shouldn’t be regulated by the states because it is an Internet application, but should be subject to paying access charges, providing 911 and CALEA (Communications Assistance for Law Enforcement Act) obligations. "But that’s not the same as being regulated," he said. "Our preference is that they don’t regulate the future."

The FCC is planning to open a proceeding on VoIP near the end of this year. Last week, Christopher Libertelli, senior legal advisor to FCC Chairman Michael Powell, speaking at the U.S. Telecom Association conference in Las Vegas, said the commission could develop three sets of rules based on the different methods of provisioning VoIP services: via private networks; over networks that touch the PSTN; and via evolving peer-to-peer networks.