Reach Out, But Don’t Touch

AT&T Corp., Intel Corp., Texas Instruments Inc. and ITXC Corp. are among the companies representing an expanded coalition formed to convince regulators to apply light regulation to VoIP technology.

Uniting under the Voice on the Net, or VON Coalition, the diverse group of companies disclosed plans in February to reach out to state and federal government agencies to resist regulatory barriers they argue could stifle the growth of VoIP networks. The VON Coalition plans to lobby state regulators, the FCC and Capitol Hill. In February the FCC opened a notice of proposed rulemaking seeking public comment on VoIP regulation.

"If we subject this new technology to legacy telecom regulation, consumers and business users will miss out on the new services, increased choices and better prices that VoIP can deliver," Peter Pitsch, communications policy director for Intel, said in a press release announcing the expanded coalition.

The coalition says it will work with public safety and security officials to answer concerns regulators and other agencies have expressed, such as the availability of emergency 911 services over Internet-based phone networks and law enforcement’s ability to wiretap calls over the Web. ITXC Chairman and CEO Tom Evslin claims the industry can develop better emergency services using IP technology than is possible over the public telephone network.

On Dec. 1, the National Emergency Number Association (NENA) announced it reached an agreement with the VON Coalition and other companies, including Vonage Holdings Corp. and 8×8 Inc., to provide emergency 911 service. NENA listed several objectives the companies have agreed on, including the support of long-term solutions to provide, among other things, the location of the caller.

Coalition members say they favor taking a fresh look at ways to subsidize the Universal Service Fund. Evslin says the coalition is asking that the mechanism for subsidizing the USF be fixed — not requesting VoIP providers be exempt from contributing. The FCC has opened various dockets evaluating ways to reform the multi-billion dollar fund used to subsidize telecom service in rural areas, schools, libraries and health-care facilities. Congress ultimately may step in with legislation to reform the fund, although sources inside the Beltway say it could take years to pass a comprehensive bill.

The coalition also promotes an overhaul of the rules by which phone companies compensate one another to interconnect their networks. Vital to the industry are the pending rules the FCC issues determining whether, and how, VoIP providers must compensate local phone companies such as BellSouth Corp. to pass on calls over their networks.

Says Evslin: "In particular, regulators should avoid imposing above-cost access fees to any type of Internet application, including any form of VoIP. Applying excessive access fees to an innovative new service will drive up costs to consumers, stall innovation and slow VoIP adoption but without any economic justification."

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