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Why VoIP Makes Telecom Regulations Irrelevant
An anonymous reader writes "BusinessWeek Online analyzes why state and federal regulators' attempts to label VoIP (Voice over Internet Protocol) a "telecommunications service" is wrong - and threatens to undermine the technology. It quotes Vint Cerf as saying: 'To single out VoIP as a telephone service is a terrible misunderstanding of the Internet industry. I would submit that, someday, the phrase Internet telephony will sound as archaic as 'horseless carriage' sounds today.'" We've also recently discussed Vonage's attempts to fight telecom regulation in Minnesota.
By Jane Black
Time to Rewrite the Rules of Telecom
Now that voice calls can be sent over the Net, existing phone regulations are becoming irrelevant. The FCC has to make some tough choices
Since its launch in April, 2002, Internet telephony company Vonage has been a rip-roaring success. Over the last year, the Edison (N.J.) company signed up 45,000 customers, who pay a flat rate of $39.99 a month for unlimited local and long-distance calling, plus caller ID, voice mail, call waiting, and a bevy of other services.
Vonage can offer such low prices because its calls are sent through a customer's broadband connection, a technology known as voice over Internet protocol (VOIP). Sending sound in packets over the Net is cheaper and more efficient than routing calls over traditional copper wires and phone company circuit switches. And VOIP has been exempt from telecommunications taxes and standards. Until now.
In the next few days, the Minnesota State Public Utility Commission plans to hand down an order mandating that Vonage be held to the same standards, taxes, and requirements as more traditional telecom operations. In Minnesota's view, if it walks like a duck, quacks like a duck, and looks like a duck, it's a duck.
THE REAL PROBLEM. More like a sitting duck, say Vonage and a chorus of VOIP evangelists. They argue that the convoluted, often irrational, web of telecom regulations that have evolved over the last century threaten to kill a vibrant new technology and stifle greater efficiency and sorely needed investment in the ailing sector. "To single out VOIP as a telephone service is a terrible misunderstanding of the Internet industry. I would submit that, someday, the phrase Internet telephony will sound as archaic as 'horseless carriage' sounds today," says Vint Cerf, one of the designers of the Internet protocol and vice-president for technology and Internet architecture at MCI (MCWEQ ).
The rush to lump VOIP in with phone services obscures the larger problem: The 100-year-old regulatory structure for telephones is no longer adequate for today's advanced telecom services. These rules were written in a time when each technology delivered one type of service: Voice traveled over copper wires. Broadcast radio and TV signals flew through the air. Multichannel video journeyed across a coaxial cable.
The Internet has changed all that. Since information now travels digitally -- a sequence of 1s and 0s -- no distinction remains between a voice call, an e-mail, or a video stream, and it costs no more if that information goes cross-town or cross-country. For voice calls, that means the system of fees that carriers pay each other to send long-distance, regional, and local voice minutes are fast becoming obsolete. "Over time, VOIP will make the telecom system as we know it irrelevant," says Blair Levin, a former Federal Communications Commission chief of staff who's now a telecom analyst at investment firm Legg Mason in Washington, D.C.
BATTLE WITH THE STATES. That puts at least $14 billion in so-called access fees at stake, according to a 2001 FCC analysis, the latest numbers available. These are the fees that long-distance and upstart telecoms pay the Baby Bells -- Verizon (VZ ), SBC (SBC ), BellSouth (BLS ), and Qwest (Q ) -- and other local-exchange carriers to "terminate" calls, or pass them over their networks to the end customer. As carriers move traffic onto the Internet backbone, those fees no longer apply.
Small wonder MCI plans to shift 25% of its voice traffic to the Internet backbone by the end of 2003. By 2005, 100% of MCI's traffic will be carried over the Net, instead of traditional copper lines.
With so much up for grabs, states are taking an interest. On Aug. 12, Alabama ordered a "declaratory ruling" on whether VOIP will be subject to so-called access and interconnection charges that apply to traditional phone calls. Ohio's Public Utility Commission has opened an inquiry into how providers are using VOIP and whether such efforts con
Whale
The US economy is fat-packed with industries kept above water through government protection and subsidies. The telecom industry is not going to give away their revenue stream without a fight.
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Long-term effects of Bush deficits
The difference is only in the underlying technology.
If I purchase leased lines from one location to another, should I not be able to use that? Should I not be able to route traffic through the most econimical means available to me?
Now, if my friend at another company says that I can route over his network as well, should a company have the right to say that we cannot do this because I will no longer be paying for high cost leased lines, and now working off a friends network? And if another friend hooks in, why should he not be afforded the same courteousy that I am? That is why you cannot tax it. There's really nothing to tax.
They are trying to adapt the situation to the business model, not the business model to the situation. They are trying to tell you what you can and cannot do with your network. They are sacrificing your rights to protect their profits.
and to answer your question about why the two are different, VoIP works on packet switched networks, whereas traditional phone works on circuit-switched networks. a packet switched network can handle multiple calls, can be routed dynamically, and requires essentially less infrastructure. A circuit switched network relies on endpoint-to-endpoint transport, therefore is less prone to lag, but can only handle a fraction of the communication.
A phone T1 can handle 23(I think, I can't remember) incoming calls, but a data T1 can handle
a lot more, but not as reliably.
That's the big difference between Voice networks and VoIP networks.
Vonage offers residential service cheap. I've had them for about 6 months, and am so far extremely happy with their service.
For $25/month, I get 500 minutes to anywhere in the US or Canada, and unlimited local. Anything over that is 3.9 cents/minute.
Or for $40, you can get unlimited.
Both plans include voicemail, caller id, call forwarding. You can also get a second # for $5 that will forward to your number. It's useful if you have out of state family that calls you frequently, and you want to make it a local call for them.
I don't work for Vonage, or have any stake in them, I'm just an extremely happy customer of theirs.
I pay $46 for my cable tv and cable modem, and $25 for the phone service. The $71 still comes out cheaper than my POTS was, and I get cable TV and cable modem.
VOiP users don't get access to 911 call centers though. So why should we have to pay for it? When I call 911 from my VOiP line, it goes directly to the police station, not the 911 call center.
Downloading slashdot's mainpage travels over the same infrastructure as making a VoIP call, so why should the latter be subject to special taxes?
Because this isn't quite true. Most backbones run ATM or some other protocol that provides real QoS. Internet connections have always been "best effort", whereas voice was given the highest priority.
Slashdot can handle a 5 second delay in delivering packets -- your phone can't.
In short, while bits are bits, the method of delivery is different and needs to be paid for that way.
Learning HOW to think is more important than learning WHAT to think.
Quicknet Technologies
OpenH323 Project
Are you willing to give up reliability? Are you willing to give up 911. What?
In both caes, yes. Our phone has only been down twice since we've had it. Once when Charter was working on the line (Down for about an hour), and once when I was rerouting the cables by the computer. Both times, Vonage recognized that the phone was down, and automatically routed any incoming calls to my cell phone.
As far as not having 911, our emergency calls are automatically routed to the local police station, which happens to be right across the street. The one time we had to call 911, the police were at our house before our neighbors had even gotten connected to a 911 operator. They were still on hold.
Do you want reliable telephone service? Even if there is a power failure?
During the northeast blackout a month ago, my landline phone went dead also. Meanwhile, if Roadrunner had backup juice on their network, my broadband would not go out even in the event of a blackout (my home server, firewall, Tivo and Vonage ATA can live for 4 hours off the grid).
Do you want guaranteed availability of telephone service at uniform and reasonable rates, even if you live on a farm or in a slum?
Where there is broadband Internet, there can be VoIP. As last-mile broadband gets more economical via wireless and optical (along with traditional copper and cable), so will VoIP.
Do you want 911 service that works?
I can dial 911 from my Vonage home telephone just fine, thank you very much.
If Vonage starts overcharging, I will be happy to switch to another VoIP service, such as packet8.
Check out Gnomemeeting, linphone, Asterix, and Bayonne.