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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.
We've seen time and time again, the government is not very good at handling technology. They inevitabley screw it up. They overregulate and kill whatever was good to begin with. After a while they'll find a large corportation that they can back via the DMCA to comandere the technology and prosocute the originators for piracy. This has happened before. And it looks like they're planning to do it again.
KEEP YOUR GRUBBY HANDS OFF.
A free, open internet has done wonders for this country economically and technologically. Yet they continue to turn and backstab the free and open system.
damn... damn damn.
Slashdot Syndrome: the sudden, extreme urge to correct someone in order to validate one's self.
...can someone perhaps explain?
Traditional telephony lets people talk at a great distance and travels over telco lines. And gets taxed.
VoIP lets people talk at a great distance and travels over telco lines. And does not get taxed.
What is the difference? A matter of what the encoder/decoders look like? A matter of historical roots of VoIP emerging from a (presumed) free technology?
I want free phone calls as much as the next guy, but I'm not sure I understand why VoIP is so different from traditional phone calls. (Or for that matter, why email and AIM are not subject to taxation too, since they also travel over the same telco system, but even mentioning this greatly increases my troll-likelihood.)
If data should be taxed, then do that -- tax by the megabyte or whatever. But there's no particularly good reason that some data should be taxed more than other data. Downloading slashdot's mainpage travels over the same infrastructure as making a VoIP call, so why should the latter be subject to special taxes?
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I've seen all the stuff about Vonage here in Minnesota. Vonage advertises constantly, but given that my broadband provider is Comcast, I wouldn't exaclty WANT to rely on that service staying up, and that's what worries me about how VoIP is marketed by a lot of places.
It's great that for only $39.99 (plus broadband, easily $45/month) I can make calls all across the nation. Sounds nifty. And yes, it's increased competition. But unfortunately, Vonage makes little fuss about the fact that if your broadband provider goes down you're screwed. How about those 911 calls?
For very close to the same prices, I can get MCI's The Neighborhood plan with DSL here. Same thing with Qwest now. Yeah, I'm paying extra taxes, which sucks, but they are required by law to give me service. There's a maximum amount of downtime they're allowed, and I can call 911. I use The Neighborhood without DSL now, and even if the power goes out, I can still make calls.
Given this nation's power grid and the lack of good service contracts and requirements for uptime with broadband providers, I don't think I'd like to trust VoIP anytime soon here.
So, VoIP people, get back to me when you're willing to submit to some regulations for the quality of service.
The power of accurate observation is commonly called cynicism by those who have not got it. - G.B. Shaw
Did everyone sleep through the blackout of 3 weeks ago? VOIP didn't work. Cel phones didn't work. Land lines worked. Why? The fundamental reason is regulatory requirements that ensure a certain level of reliability. Those requirements date from a different era - lord knows they'd never pass in today's "pro-business" climate. Imagine if everyone had been using VOIP and there were no self-powered phone network? I hope you have a ham radio license!
The entire purpose of regulatory bodies is to shape the market such that companies act in ways beneficial to the public interest, where absent regulation they would be inclined to cut corners for short term profit, setting up everyone for a disaster in the long run.
Why can vonage sell unlimited phone service for $40/mo? They externalize all the costs of line maintenance. If your broadband service fails, you have no phone, and it's not Vonage's problem to rectify it.
Personally, I can't stand ILECs and in fact don't have a land line myself, but the dogma that telephony shouldn't be subject to regulatory requirements if it uses the internet doesn't sit well with me.
Of course, if internet service was as reliable as electric service, or if either were as reliable as phone service, this wouldn't be an issue. But the reason the land-line phone service is reliable is gov't regulation.
-Isaac
I am not a lawyer, and this is not legal advice. For Entertainment Purposes Only.
Is that they do this.
Little startups figure out ways to make money off the new technology, because they're not so entrenched. Massive megacorps trying to adapt to new technology are like covered wagons trying to chase a bee. As much as they'd like to catch that bee, they just can't maneuver fast enough. So rather than let somebody else eat their honey, they pass a law requiring that the entire prairie be filled with bug spray. "Bees can sting!" they say, ignoring the fact that bees make edible products.
Eventually, they get the covered wagon heading in the right direction, they roll on up to the bee carcass now lying in the road, and then "relent", "embracing the new technology". I.e., through legislation they've succeeded in making technology no longer a moving target, and now they want their piece of the action.
I don't think it's surprising that many of these technologies are proving somewhat resistant to legislative bug spray. People are still swapping music and movies, people are still using Internet telephony and listening to Internet radio. Evolution will naturally start to produce tech that can't be hurt by legislative bug spray.
It's rare that you're presented with a knob whose only two positions are Make History and Flee Your Glorious Destiny.
And yes, the Vonage customer's end is VOIP and independent of the existing phone line system(this is only true for cable, if the broadband is DSL then it's part of the phone system).
But the other isn't. In fact, it's that non VOIP other end that allows Vonage to exist at all.
Anyone who says Vonage isn't a telephone service doesn't understand the system.
See, if two people had broadband(a requirement for the Vonage system) they could talk in stereo sound with video added for..... NOTHING.
That $40 a month Vonage charges people is for the phone system/internet interface it offers. Nothing else.
If EVERYONE had a broadband connection tommorrow, Vonage would file chapeter 11 the following day.
Vonage uses the existing phone system for half or more of it's buisiness, it should have to support that system like every other buisiness that profits from it's existence.
Better yet, anyone else sick of the governments which make it happen?
Big business has money, but only government can turn that money into power. Without the aid of government, big business would have no more or less power than you or me. Let's address the root of the issue, not the symptoms.
They are trying to defend their current capital investments in their local framework. VoIP is doing much what the MCI's and Sprints of the a while back did, by bypassing the Bell Atlantic monopoly. VoIP bypasses the very expensive "last-mile" of phone lines to reach each public house hold that are only being utilized by incoming calls (for now).
When you make a VoIP call it routes the calls online to the proper local server which then dials out in the city that it resides as a local call. MCI did this a while back with microwave towers, that bypassed the long distance lines that Bell lay down between cities nationwide. To solve the problem they "taxed" your local phone bill $4-5 or so each month. So you can see why this is a threat to all of the phone companies, (1) because they are not recieving this tax, (2) they have lay a framework that will soon become absolete.
As a result the big businesses and small local providers that utilize the existing framework are losing alot of money in investments that they once thought they would have control over for times to come. The only way they see revenue coming in is some sort of government regulation.
VoIP is a great technology and I would love to see it developed even further, but we just need to find somewhere in the middle that the phone companies and VoIP technology can both benefit, so we don't destroy our economy.
austintsmith.com
You really should file a complaint then. Unless, of course, your "landline" phone is cordless, in which case your phone service was up but you didn't have a phone that ran off the power supplied by the phone grid.
The phone companies are required to keep the phone service running in case of emergencies. They may not be able to handle the call volume (c.f. 9/11), but they have to provide dial tone, at least for some "reasonable" amount of time (CO's generally have sufficient backup power onsite for 72 hours, and they're usually on the same priority level as hospitals when it comes to getting diesel fuel during emergencies).
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.
None of which is available to the rural communities the grandparant mentioned. In the case of some rural farms the "last mile" is more like the "last 20 miles". Even microwave transmission has issues at that range unless you put up some pretty honking big towers. WiFi sure as hell isn't going to cut it. Powerline may be an option at some point in the future though, but even then it's questionable that it will be affordable.
I can dial 911 from my Vonage home telephone just fine, thank you very much.
As the AC pointed out, no you can't -- although it doesn't look as drastic as he points out. Some "local public safety answering points" may be 911 call centers. But not always and roaming 911 is a complete no go. Equally importantly, quoting from here:
That makes it an unviable solution for E911 services.
BTW, Sprint's services were all up during the blackout. Landline, cell, and internet. Most of the cell towers were overloaded in volume and most of their customers (including ones in the same physical building) lost Internet access due to no backup power, but any hosted customers in the NE region remained powered up and doing business. And the landlines worked exactly how they're supposed to.
While I agree that a lot of the regulations and cost structures in the telephone arena are designed specifically to keep competition out, the need for a reliable emergency service and the need to continue to supply rural customers with service are two points that still need to be adhered to. Vonage isn't capable of solving the second issue, but they need to address the first if they're going to bill themselves as a phone company.
It seems like people are forgetting why telecom regulation exists.
- The ILEC phone company has to provide POTS to everyone at the same price, they're not allowed to simply bypass a small town where they can't make a profit on concentrate only on the profitable cities.
- 911 always gets to the correct local authorites on a POTS line. Cell phones have had their problems with this, but they're being ordered to make it work now. You don't even need to have paid service to reach 911, any network that hears an emergency call request must handle it. They even have to drop a paying customer to make way for a 911 call if that has to happen. By comparision, VoIP sometimes has no clue what to do when you dial 911...
- POTS is required to have golden uptime standards by law. Yeah, when was the last time you picked up your phone and didn't get a dialtone? The ILEC has to build a super-reliable network, because we're so dependant on it. Afterall, when phone service is out the local police have have to do extra patrols to make up for the fact they've lost the 911 reporting system, that costs taxpayer money when that happens.
So, if you want to create a service that's going to replace POTS, you've got to be as good as POTS. We can't have Vonage come in and tell people it's okay to cancel their POTS lines and use them itstead unless Vonage is willing and able to totally replace all of the public-interest services that ILECs provide.
Let's face it, the ILECs don't provide 911 and their high reliablity standards just to be nice, they do that because we require them to by law. The least we can do to pay these companies back is promise that anybody who competes with them also has to jump through the same hoops...