[March 16, 2005]

Martin as FCC Chair: Good for VoIP?

By David Sims, TMCnet CRM Alert Columnist

The Wall Street Journal, ABC News and USA Today are reporting that Kevin Martin, currently a Commissioner at the Federal Communications Commission, will replace outgoing chairman Michael Powell. VoIP industry denizens are watching Martin, a Bush appointee, carefully for indications of how he’ll handle VoIP regulations.

Back in January of 2004 Martin told Business Week magazine that answering VoIP issues such as how phone taxes apply, how will the FBI monitor such calls and “do you really need to be able to call 911 from your Xbox video-game console?” won’t be easy: “The issues are complicated -- and constantly morphing -- because of the myriad new ways technology can be used.”

Martin, called “ more regulatory-minded” than Powell by one news outlet, joined the FCC in July 2001 after serving as a special assistant to the President for economic policy. Last winter, he led a successful coup against FCC Chairman Michael Powell’s plan to unshackle the powerful Baby Bells – Verizon, SBC, BellSouth and Qwest – from regulations that force them to sublease their lines to competitors.

“Voice over IP raises a lot of regulatory issues that can’t be simplified into one set of problems, because VoIP services vary quite dramatically,” Martin told Business Week. “Some services require special equipment for both the person making the call and the person receiving the call … each kind of service raises different competitive issues. The one that’s effectively a computer-to-computer call may need one set of rules. Other services, which take advantage of and plug into the public service telephone network, may need another set of rules that treat them more like a traditional phone provider.”

Martin said the FCC is going to have to approach VoIP “in a practical sense as well,” addressing the thorny 9-1-1 issue by saying “people have an expectation that if they can pick up a telephone and it connects into another person’s house that it’s a telephone service. With that comes an expectation that this ‘phone service’ will have 911 and access to other emergency services. They also expect that law enforcement will continue to have access to calls that must be tracked.”

And on whether VoIP should be required to contribute to the Universal Service Fund, Martin said, “One way to address the change in technology that’s occurring is to require people to contribute if they use a telephone number. A telephone number, after all, is a key to the public system telephone network. So if you’re using voice over IP that works from PC to PC, you would not contribute to the universal service fund. But if you use one of the services that do give you a telephone number, you would pay.”

In short, Martin thinks, “customers who take advantage of the PSTN should be the ones contributing to its upkeep. It’s a solution that allows us to make sure that VoIP services that are used as substitute telephone service pay, while those that are an Internet-only service don’t.”

The “telephone number solution” would, Martin thinks, “capture the people who take advantage of the PSTN, while not being overly inclusive.”

Reuters reports that Martin, 38, became a Republican FCC commissioner in 2001 and clashed with Powell “over deregulating local telephone network sharing rules and relaxing media ownership limits.”

Martin in 2003 battled Powell over easing local telephone network sharing rules, bucking the chairman and voting with the Democrats to preserve the sharing requirements. Those rules eventually were struck down by a federal appeals court and Martin voted last December with Powell to ease the sharing requirements, USA Today reports.

Martin also pushed Powell to go further in deregulating the media industry and pressed for a crackdown on television and radio stations that violated decency standards. Broadband.com thinks that Martin “seems to have a shred more consumer advocacy in his blood [than Powell], and wasn't comfortable at the speed at which Powell was tearing down competitive guidelines.”

Not all in the industry approve of Martin. Declan McCullagh, CNET News.com's Washington, D.C., correspondent wrote a month ago that “Martin's voting record has made him an unreliable ally of deregulation and the high-tech industry. That's why some advocacy groups are backing a dark-horse candidate as a worthy heir to Powell: Peter Pitsch, who's currently an Intel lobbyist.”

Pitsch, known for his involvement in the VON Coalition trying “to keep 1930s-era telecommunications laws away from Internet telephony,” according to McCullagh, was the favorite of the intensely deregulatory types who refer to the late President Reagan as “that liberal.”

Powell began the process of dealing with disruptive technologies like VoIP and WiFi, and McCullagh noted that “whoever succeeds Powell will wield tremendous influence during a period that promises to be no less disruptive.”

David Sims is contributing editor and CRM Alert columnist for TMCnet.