VoIP Peering – Get It Straight Before You Get It in Order

On April 9, 2008, the FCC (News - Alert) released an order, in an obscure enforcement bureau matter, declaring that a provider’s VoIP peering service was a “telecommunications service” subject to Title II regulation.

In the order, In the Matter of Compass Global Inc., the Commission used its rationale of the 2004 AT&T IP-in-the-Middle. The FCC says, “Compass Global’s offering of VoIP peering to other wholesale VoIP providers is a ‘telecommunications service’.” The “IP-in-the- Middle” three prong test originated from the 1998 Stevens Report which tentatively concluded that “phone-to-phone” IP service was a “telecommunications service” if providers meet the following:

• It holds itself out as providing voice telephony or facsimile transmission service
• It does not require the customer to use CPE different from that CPE necessary to place an ordinary touch-tone call (or facsimile transmission) over the public switched telephone network
• It allows the customer to call telephone numbers assigned in accordance with the North American Numbering Plan, and associated international agreements; and
• It transmits customer information without net change in form or content.

VoIP Peering (News - Alert) has finally made a large enough impact to begin to fall under government regulation, but enthusiasm must be tempered here a bit. Generally speaking, rules are a good thing. But too many rules, outdated rules that don’t apply, or just plain old bad rules are impediments to a smoothly operating society. In this case, the FCC has decided to rule and issue its own interpretation as an order deeming VoIP Peering a telecommunications service subject to regulation. Just as enthusiasm must be tempered, so too must the desire to rule on things not fully understood.

Apparently the FCC does not know that:

• VoIP Peering is inherent in all VoIP communications
• VoIP Peering is a marketing term for a VoIP network and also transport service
• IP Audio Bridging could be the new industry term and pseudo service for VoIP Peering
• Transport is not Voice

A potential concern is that a blanket order covering anything known as VoIP Peering would be also be known as a telecommunications service. How would this apply to enterprise “A” establishing a SIP trunk to enterprise “B (News - Alert)” (either over the public Internet, a private 3rd party IP network, or directly between their IP gateways) and passing VoIP traffic? That is in fact a form of VoIP Peering. Are they providing each other a service? They are presumably not billing each other for the traffic, so then how does FCC regulation play a role? The present and future of VoIP Peering is not limited to “service” providers, unlike the notion of telecommunications companies in the future of VoIP. IT

Hunter Newby (News - Alert) is the Chief Strategy Officer and a Director of a Special Purpose Acquisition Corporation focused on the communications industry.

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