Congress Weighs In On VoIP Regulation

In the debate over how to regulate

the Internet-based phone market, Congress is jumping into the fray.

The U.S. Senate Committee on Commerce, Science & Transportation approved a bill this summer that generally would prevent states from regulating voice over the Internet applications, but amendments were added that would allow states to require Internet phone companies to provide state subsidies to keep rates affordable and pay local phone companies for access to their networks. Two senators also added an amendment allowing states to require Internet phone companies to provide 911 and enhanced 911 services.

The amendments underscored the difficulty of avoiding regulation while seeking to preserve a wide range of objectives.

New Hampshire Republican Sen. John Sununu, the original bill’s sponsor, said he would continue to work with Rep. Chip Pickering (R-Miss.) to complete similar legislation in the House of Representatives and ‘pursue final passage of a bill this year.’ However, given that Congress is in recess until September and with November elections looming, observers question whether there is time for any bill to pass both chambers. The target adjournment date for the 108th Congress is Oct. 1.

Separately, the FCC is deciding how to treat Internet phone service, a technology being adopted by telecommunications providers of all sizes, from upstarts like Vonage Holdings Corp. to the largest local phone company, Verizon Communications Inc. FCC spokeswoman Diane Griffin could not provide a target date for releasing rules.

It is possible the commission will act before the end of the year to resolve state and federal jurisdiction issues involving the technology, says an FCC source close to the issue. Vonage last year asked the FCC to overturn a Minnesota Public Utilities Commission order and rule its Internet telephony service is an interstate service under federal jurisdiction and not subject to telecommunications regulations.

An FCC ruling on the jurisdiction issues could be limited to the Vonage petition or decided in a broader rulemaking, the source says. The deadline for submitting reply comments to the FCC regarding its proposed IP telephony rulemaking was July 14.

“Resolving the questions in the NPRM is a top priority for the bureau. However, we received over 150 initial comments and we still are counting the reply comments received July 14. So there’s a big record and a lot of complex questions to sort through,” the FCC source says. “Accordingly, while we hope to move forward as quickly as we can, I’m not sure we could commit to having something done by the end of this year.”

Glenn Richards, a telecommunications attorney who is a partner with the law firm of Shaw Pittman LLP, says the presidential election could affect the timing of a ruling: A Kerry administration likely would mean FCC Chairman Michael Powell, a Republican, would step down as chairman and be replaced by a Democrat. Michael Copps and Jonathan Adelstein are two Democrats now on the commission.

“It would be ambitious to think something will be done by the end of the year,” he says.

Powell has emphasized the need to apply light regulation to Internet phone technology to foster investment, but requests to safeguard telephone subsidies, permit law enforcement to wiretap calls, and support emergency 911 services are among the issues that call into question whether the agency can keep the regulations to a minimum.


House of Representatives
Minnesota Public Utilities Commission
Shaw Pittman LLP
U.S. Senate Committee on Commerce, Science & Transportation
Vonage Holdings Corp.

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