VoIP Innovators Criticize the FCC's Title II Decision

On February 26, 2015, The Federal Communications Commission (FCC) voted to regulate broadband Internet services as a public utility as a way of regulating high-speed Internet services. The new rules, which were approved through a 3 to 2 vote, are intended to ensure that no content is blocked and that the Internet does not become a highway with pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else. In essence, this is the concept of net neutrality.

Mobile data service for smartphones and tablets, as well as wired lines, are being placed under the new rules. There are also provisions designed to protect consumer privacy and to ensure that Internet service is available to people with disabilities and in remote areas.

It seems that the major discussions are concerned with the fact that the FCC is reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. This comes to us from 1934 when the Federal Radio Commission became the Federal Communications Commission.

The Communications Act of 1934 is a U.S. federal law, which was signed into law by President Franklin D. Roosevelt. The stated purposes of the Act are as follows which the FCC was created to administer;

Regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense and for the purpose of securing a more effective execution of this policy by centralizing authority theretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication.

Stepping back into the present, a group of people who are being referred to as “tech elders” stated their concerns this week about the impact that the FCC’s ruling would have on their businesses. One area that appears to be greatly impacted by this decision is the Voice-over-IP (VoIP) market. It seems that a major issue is that VoIP could be treated as a service rather than as an app.

Jeff Pulver, who is a co-founder of Vonage and one of the tech elders, said that anyone dismissing the potential financial impact of Title II does understand how Wall Street thinks. He also feels that as someone who likes to innovate and disrupt, having to go to the FCC for permission to be disruptive will only take away any incentive that many people have to move forward.

I’m not sure how or when, but this discussion seems to have moved completely into the financial aspect of the FCC ruling. Before the vote in February, FCC chairman Tom Wheeler made the following comments, "These enforceable, bright-line rules will ban paid prioritization and the blocking and throttling of lawful content and services. I propose to fully apply, for the first time ever, those bright-line rules to mobile broadband. My proposal assures the rights of Internet users to go where they want, when they want and the rights of innovators to introduce new products without asking anyone’s permission."

The question is what type of effect this decision will have on such technologies as VoIP. In the past by not regulating VoIP as a telecom, it allowed some really great experiments and advancements. This includes more "phone replacement" services that we are currently seeing today. Some of these voice features are now built into a lot of products.

One of Pulver’s biggest criticisms against reclassifying broadband infrastructure players under Title II is that the ability to create new advancements will be lost. The fear is that declaring VoIP a Title II regulated phone service will result in rules and regulations that will stymie its development.

We live in a world where people are used to Skyping with friends and family regardless of where they are. Companies of all sizes are beginning to deploy VoIP strategies that keep their workforce connected regardless of their location. The feeling of the tech elders is that these services might never have come to pass without significant efforts over a decade ago by many in the Internet community to keep government regulators at bay as they developed these technologies.

This issue is far from over. Although the vote was taken a couple of weeks ago, there is the possibility that this will find its way into the court system where it will once again be debated for several years.