BY LAURA GUEVIN
Editorial Director, Communications ASP

VoIP: The Great Legislative Afterthought

Since the FCC decided it wasn't ready to legislate voice calls over data networks in 1998, the subject of regulating VoIP has been shrouded in miscommunication. The first hint of real trouble came about a year ago, when the House of Representatives passed the controversial H.R. 1291. The bill contained an amendment added one week before it was passed, stating that the FCC would not be precluded from imposing access charges on providers of Internet telephone services. The bill has not yet made it to committee in the Senate, and is apparently dead in the water.

So it comes as no surprise that Rep. John D. Dingell (D-Mich), who thought that H.R. 1291 didn't do enough to regulate Internet telephony, is a co-sponsor of H.R. 1542, the Internet Freedom and Broadband Deployment Act. The bill, currently in House committee, is sponsored by Billy Tauzin (R-La). It basically amends the Telecommunications Act of 1996, removing restrictions imposed on RBOCs for offering long-distance services, and allowing them to provide high-speed data services. They would not have to open their local service markets to competition before entering the long-distance/high-speed services market -- a previous requirement that offered opportunities for local ISPs and CLECs to get in on the game. The bill also states that the FCC will not be able to require the RBOCs to offer unbundled access to the network elements used for provisioning high-speed data service, or require them to offer high-speed data services at resale or wholesale rates. That effectively eliminates opportunities for smaller carriers, who rely on the Bells' networks to transmit their customers' data.

As if that isn't enough to get the service provider and competitive carrier communities worked up, the bill contains another interesting provision (one of four amendments added to the bill in the final hours of committee discussion), one that basically makes it illegal for a Bell operating company to market, bill, or collect for long-distance voice-over-data services -- until that company is allowed to offer InterLATA service (service to or from a point outside the Bell's operating region) in that market. In other words, if the Bell isn't allowed to offer circuit-switched long-distance services, then no one (ISPs, their customers, etc.) will be able to offer or use that Bell's high-speed data network for voice. This is a roundabout way of saying VoIP will be illegal -- until the Bell is allowed to offer long-distance services.

The VoIP provision is really just the icing on the cake for a bill that's going to turn the clocks back to a time when the Bells didn't have competitors -- period. But what most amazes me is the inherent contradiction of the bill. It's main goal, as described by Tauzin, is to define the Internet as a separate communications medium, thereby freeing the Bells from the constraints set forth by the Telecommunications Act of 1996. After all, Tauzin has reasoned, cable companies aren't subject to those regulations for running data over their pipes, so why should the Bells be treated unfairly? The bill actually defines the term Internet as "The myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio." A clear distinction between circuit-switched telecommunications, and the myriad of information sent as data transmissions. Unfortunately, "information of all kinds" apparently doesn't include voice over data. How convenient.

THE FUTURE OF VoIP
It is uncertain what will happen to H.R. 1542, although the House Judiciary Committee recently asked to review the bill once Tauzin's Energy and Commerce Committee is finished with it. The referral would give the Judiciary Committee a chance to amend the bill, and possibly delay activity on it during this legislative session. In any event, if the bill does make it to the Senate at some point, it is expected to encounter more opposition there, and Senate Majority Leader Trent Lott has previously opposed similar bills.

It's becoming clear that VoIP is a serious threat to the RBOCs, and tacking on last-minute legislation to govern its legality and regulation is not the proper approach to this hot topic. I think it's curious and extremely disheartening that developing nations around the world are taking steps to deregulate their telecommunications monopolies and legalize previously banned voice-over-data transmissions, while some U.S. legislators are attempting to move in the opposite direction. As I've said in previous columns, taxation and regulation of VoIP may soon be inevitable as it becomes a pervasive way of making telephone calls. But any legislation that would govern its use should be clear and well planned. Last-minute amendments that address voice-over-data transmissions in a vague and confusing manner, and serve only to placate the threatened RBOCs, are insufficient and insulting to the enormous potential of VoIP technology.

Laura Guevin welcomes your comments at lguevin@tmcnet.com.