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.

Comments

Regulation Kills

[Doesn't_Comment_Code]

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.

A pox on everyone's house

[isaac]

There's no doubt that the driving force behind state regulation of "internet telephony" is the collection of access fees. That said, those advocating no regulation of companies selling phone service that bills itself as a replacement for landlines are unrealistic.

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

Re:A pox on everyone's house

[Spy Hunter]

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.

Right. And whose fault is it that your broadband service failed? Your broadband service provider! Who should be taxed and regulated? Your broadband service provider!

Historically the physical infrastructure has been tied to phone service so completely that the laws for both have become joined. Now that the service can be separated from the infrastructure, the laws need to be revised. Broadband providers should be subject to regulation and taxes much like phone companies today, to guarantee adequate service to everyone. Internet telephony companies should not be subject to very much regulation, if any.

There are two ends to a phone call.

[Machina70]

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.

Re:Anyone else sick of

[ratamacue]

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.

Re:Anyone else sick of

[AustinTSmith]

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.