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Will FCC Regulate Internet Phone Calls?

Posted by timothy on from the unctuous-rulemakers dept.

Ridgelift writes "The FCC will begin hearings on Monday December 1st to see if they will get involved in regulating calls placed over the internet. Since a federal court in Minnesota ruled a month ago that calls delivered over the Internet are not subject to state regulation, Qwest, Verizon and SBC have all announced their intention to deliver more calls over their data networks. "The stakes in the debate are huge. Federal and state governments could lose billions of dollars in revenue from regulatory fees if calls moved onto the Internet are no longer subject to the charges.""

64 of 261 comments (clear)

  1. What will they do? by ryanr · · Score: 5, Interesting

    Well, let's see... the Federal Government is in charge of deciding whether to regulate it... and the Federal Government stands to lose billions in revenue if they don't regulate it...

    Well, I'm sure they will do the right thing.

    1. Re:What will they do? by Anonymous Coward · · Score: 3, Interesting

      God Bless Taxes!

      I know I should be mad, but Im only focusing on the fact that data isnt taxed (should it be?) then why should Internet Telephany be taxed?

    2. Re:What will they do? by silentbozo · · Score: 5, Interesting

      This is an area where the big telephone companies stand to gain, one way or another. Right now, Qwest and other Baby Bells are pushing to go to VOIP, not because they want to, but because if they don't they're going to get their lunch eaten (much as they were forced to offer DSL to try and kill off their competition.) After all, by offering VOIP, they're cannabalizing local phone service, on which they make TONS of money.

      So why the big push? Well, if the Feds do nothing, they'll need to have a foot in this new market to compete, AND they can save all that money in connection costs for long distance. If the Feds regulate, then the Baby Bells are no worse off than they are now, but all the new VOIP startups get hobbled, big time.

      Several commentators have basically noted that the established teleco's are playing chicken with the Feds - either regulate and put us back on top of the game, or else we'll take all our local service (and your freebie tax revenues) and put it in this new area.

    3. Re:What will they do? by Zocalo · · Score: 5, Insightful
      I'd have to agree about the "what". That governments are going to try and "regulate" (AKA "tax") IP telephony is pretty much a forgone conclusion I think. What is more interesting to me is the question "how will they do it?"; do you tax the customer, the telco, or both?

      Taxing some telco that decides to shunt calls over its private data network, or even the Internet, is one thing, but how do you begin with taxing a IP telephony call made directly between two PCs? What if only one PC is in the US, and will it matter which one initiated the call? How do you even *start* with something like Skype?

      You could try to tax the telco and not the individual, but that is surely going to lead to a plethora of loopholes and tax dodges as the telcos shift costs onto their customers. You could try a flat rate "Internet tax", but that's going to create a firestorm in the voting classes, never a good idea if you care about re-election.

      Well, I'm sure they will not do the right thing.

      --
      UNIX? They're not even circumcised! Savages!
    4. Re:What will they do? by buffer-overflowed · · Score: 5, Interesting

      Umm, long distance is way cheaper than local from a distance versus distance standpoint. Access minutes are basically to suplement the increased costs of providing and maintaining the local loop So pushing traffic off the long-distance networks and onto the local networks (through pushing VOIP and DSL) will cause the ILECs to charge more (we've already gradually seen this happen, as local phone service increases in cost, while long distance decreases in cost [over say, a decade ago]). The ILECs are in a unique position to capitalize on this, but it's not going to get over the problem of the local loop. Some people say wireless will, but I doubt that.

      --
      The key to the enjoyment of pop music is to replace any instance of "love" with "C.H.U.D."
    5. Re:What will they do? by Thing+1 · · Score: 2, Insightful
      Well, I'm sure they will do the right thing.

      What blows me away is the Federal Government uses words like "revenue" when describing the taxes that they take from us, using the threat of a barrel of a gun to make sure we pay.

      That's most emphatically not "revenue", which is money earned in exchange for goods and/or services entered into willingly by both parties.

      If we've found a more efficient way of doing things, most especially because the older, less-efficient way of doing things was less efficient because of arbitrary additional charges, then why should we be punished simply because we can now do more with less?

      But then I'm not a politician, I don't understand their doublethink.

      --
      I feel fantastic, and I'm still alive.
    6. Re:What will they do? by quacking+duck · · Score: 2, Funny

      Hmm, obsolete revenue model, misguided legislation to keep some sort of guaranteed revenue against a new and better technology, what does that remind me of...

      *cough*RIAA*cough*MPAA...

      Excuse me, I'm feeling a bit under the weather...

    7. Re:What will they do? by jc42 · · Score: 3, Interesting

      Right. And note that, without regulation, there would never have been telephone service in many rural areas (and in some parts of some cities).

      We do have a similar situation with the Internet in the US. One of the effects of the government leaving it so unregulated is that it's only available in areas where it is profitable. Most of the rural US has no Internet service, and likely never will unless some government steps in and either mandates it or provides it. In some cases, local governments are setting it up.

      Part of the value of both the phone system and the Internet is in making it reach everywhere. The more territory they cover, the more valuable they are to everyone. But the Market won't do this, because there's no incentive to supply service to marginal areas.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    8. Re:What will they do? by Anonymous Coward · · Score: 2, Interesting

      Well aren't you a fucking jackass. You should never, ever say "move somewhere else if you don't like it" because the way this country works is people voice their opinion within the system to come to the most Democratic solutions. Libertarians like myself see a need for taxes, but excessive taxation is nothing more than horseshit.

      And a final point, on the whole, Libertarians excercise their second amendment rights more than non-Libertarians.

    9. Re:What will they do? by Uma+Thurman · · Score: 2, Interesting

      You're here willingly. You can remove yourself from taxation by leaving. Unlike un-free countries, Americans are free to leave the country without special permission.

      Since you're here, you are consenting to live by the laws of the land.

      If you want to go to a place that doesn't have such opressive taxation, there are places in Pakistan where no tax-man has set foot in 50 years. It's a veritable Libertarian paradise!

      --
      This is America, damnit. Speak Spanish!
    10. Re:What will they do? by BitGeek · · Score: 3, Interesting


      No, the reason they regulate it is to control it.

      Where do you socialists get the idea that companies only want to sell to the rich? Haven't you noticed the dozens of cellphone companies working to drive down prices as fast as they can? Notice how poor people have cellphones now?

      This is all DESPITE a crushing burden of regulation by the FCC.

      The FCC only DAMAGES the economy and the pocket books of poor people. The FCC makes it more expensive for everybody, and expesially more expensive for poor people to get access to telephones. You need to read up on some basic economics.

      Without the FCC (And the many decades of government created telephone monopoly) the poorest would have gotten telephones at much lower cost decades sooner.

      Government is the source of-- not the solution to-- all of societies problems.

      --
      Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23/ 1816257
    11. Re:What will they do? by BitGeek · · Score: 2, Interesting


      Actually, you don't know what you're talking about.

      There are countries in the world with a thousand year tradition of no government, and peace. Well, the british were able to conquer them and left a despotic dictator when they left, but they overthrew him and have lived in peace since then....

      Unfortunatel,y such countries are often invaded by countries like the US who see the lack of government (And thus the liberty that comes with it) as a threat to the world socialist government we want to create with the UN.

      Bottom line-- either you support human rights or you don't. Clearly, you don't Anonymous Coward.

      BTW-- its always funny when an AC calls a named poster a "wimp". HA!

      --
      Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23/ 1816257
    12. Re:What will they do? by Arker · · Score: 3, Informative

      Most of the rural US has no Internet service, and likely never will unless some government steps in and either mandates it or provides it.

      That's simply untrue. I left one of the most rural areas in the states a couple years ago and we had internet access there and had had it for years. I've friends in other similarly rural places and they have it.

      No, they don't have cable modems. They do have dialup, they do have ISDN if they're willing to pay for it. DSL lines are getting put in, slowly, even in the most out of the way spots. And satellite dishes have been available wherever you are for years. They're quite inexpensive today.

      --
      =-=-=-=-=-=-=-=-=-=-=-=-=-=-
      Friends don't let friends enable ecmascript.
    13. Re:What will they do? by JimBobJoe · · Score: 2, Interesting

      Most of the rural US has no Internet service

      Unless you include Direct TV's Direcwayservice which serves anywhere that has a good view of the southern sky.

      According to the site, you don't even need a modem anymore (it can upload directly to the satellite. Still imagine that the latency is a bitch though.)

      **I should add here that most of the "rural" US does have internet access. Parts of the "remote"
      US (which is very different from rural) may not however.

    14. Re:What will they do? by Fulcrum+of+Evil · · Score: 2, Insightful

      You're here willingly. You can remove yourself from taxation by leaving. Unlike un-free countries, Americans are free to leave the country without special permission.

      some of us would prefer to change things where we are instead of picking up and moving every time the local government does something stupid (which is all the time, really)

      --
      "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
  2. Goverment Wont Loose Tax Dollars by nurb432 · · Score: 2, Insightful

    If there is something they can tax, they will..

    Just a matter of when, and how much.. not IF..

    --
    ---- Booth was a patriot ----
    1. Re:Goverment Wont Loose Tax Dollars by Lumpy · · Score: 4, Insightful

      Impossible for them to completely tax or control.

      Well for a COMPANY trying to sell a service out of VoIP? yeah they can. but the biggest users are the private telcos like me. I have about 10 people on my private VoIP telco right now. I'll be adding another 4 this christmas when they recieve their Creative VoIP blaster alike clones I get from south america and a preconfigured cd with fobbit-phone on it ready for the lumpy's family and friends network.

      we save hundreds of dollars a year in long distance, rarely have outages, and only uncle Phil in colorado that has Dial-up has crappy sound quality. Even my travelling Muse Brother uses his in europe from his laptop or internet cafe's.

      they cant tax or control me as I use a non-standard protocol and port's. Plus I know of many MANY more people doing the same with other voip hardware. (Note to nay-sayers.. I get direct dial quality and only have latency problems during heavy internet outages... it sounds as good as your overpriced Cisco Voip stuff)

      voip is as uncontrollable as http traffic. Even ISP's that claim they block personal webservers can't block a determined users from putting one up.

      --
      Do not look at laser with remaining good eye.
  3. FCC Trends by Metallic+Matty · · Score: 4, Insightful

    I would go out on a limb to say that the FCC would continue to try and not dabble in the internet's affairs.

    Besides which, this medium should be free from government regulation, revenue loss or not.

    1. Re:FCC Trends by Zork+the+Almighty · · Score: 2, Funny

      The FCC won't let me be / try to shut down my VOIP

      Thank you, thank you. I now owe the music industry millions of dollars.

      --

      In Soviet America the banks rob you!
    2. Re:FCC Trends by kjs-esq · · Score: 5, Insightful

      I am inclined to agree with you that the FCC will decide to regulate it simply to insure that the individual states do not. If VoIP is considered a telecommunications service, it is subject to regulation by the individual state public utility commissions (PUCs). If, instead, the FCC reaffirms that it should be considered an informational service, it will remain as something the FCC will not dabble in and that the PUCs are expressly forbidden from dabbling in.

      This is one of those rare occasions where the decision by the FCC to get involved may actually be a good thing, because 50 sets of rules, with 50 sets of franchise fees, 50 PUCs providing oversight and 50 sets of state legislatures (or worse yet, individual municipalities like cable regulation) using the fees in place of tax increases would do *wonders* to innovation. Just look at the Minn. decision and the conniption they had about the number portability and the issue of customers from out of state having Minn. area codes. How long do you think number portability would last if each state tried to tax out-of-state users based upon in-state area codes?

      An express preemption by the FCC is the best chance VoIP has of surviving and thriving outside the grip of the incumbent telecommunication giants...

      Disclaimer: While I may be an attorney, this does not qualify as legal advice. I mean, what type of dope would you have to be to take legal advice off the Internet?

  4. Detecting internet phone calls by Karamchand · · Score: 5, Insightful

    How could one possibly even detect phone calls? It's not as simple as in the "old, analog" world where it's like there's a phone line, that means there're phone calls.
    An internet connection is used for many other tasks (be it web browsing or email or whatever) and one can certainly encrypt and/or hide phone calls so they aren't "visible" as phone calls anymore but just look like usual internet traffic.

    1. Re:Detecting internet phone calls by nodwick · · Score: 4, Informative
      How could one possibly even detect phone calls?
      They're not talking about PC-to-PC voip calls a la Skype, they're talking about regular phone calls carried over voip such as Vonage. The Detroit News has a good layman's summary of the regulation involved now. The highlight:
      Vonage typically pays the Bells or Bell rivals sharply reduced fees to carry data traffic at the other end of a call. Some of its calls are handed to long-distance companies, which pay traditional access fees. Similarly, AT&T has started carrying some long-distance calls over Internetlike VOIP networks and paying cut-rate fees to connect at the other end. In this case, the customer has no idea VOIP is involved.
      Although this approach lets them dodge many of the regulatory fees due to the internet being untaxed at the moment, they still have to hook into POTS for the local loop. If legislation goes through on taxing voip calls, it'll be relatively easy to meter the incoming calls at the POTS interface and tax accordingly.

      That still leaves open the possibility of pure voip to voip calls being undetectable (e.g. between different Vonage customers), but in the near term those sorts of calls are likely to still be in the minority.

    2. Re:Detecting internet phone calls by G4from128k · · Score: 2, Insightful

      They don't need to tax the phone call per se. My guess is that they would regulate it at the ISP level -- a tax on consumer internet service that goes to pay for universal service, shared infrastructure, do-not-spam lists, etc. Another option is a per megabyte transfer tax is would be considered "more fair" for lower-income, less active internet users. Of course congress might (or might not) object to such an internet tax.

      Personally I think taxes suck and hate that I currently shell out $30 a month in various telecom taxes. But if you buy the argument that web and e-mail access should be universal, then it suggests the need for some form of tax & subsidy scheme to provide that access to everyone.

      --
      Two wrongs don't make a right, but three lefts do.
    3. Re:Detecting internet phone calls by Jason+Pollock · · Score: 4, Informative

      If you want to talk to anyone other than your immediate friends, you will need to go through a directory service, and possibly some gateways. Once it crosses a network, it can be detected.

      Even better, there are a lot of police-driven requirements, such as call identification, tracing and intercept. Those WILL NOT be going away during the transition to VoIP. At the end of the day, if the government can't find any other way to do it, they'll force ISPs to put in VoIP proxies and regulate all of the VoIP carriers to route through them. Instant detection and billing. Heck, I wrote one for my last employer!

      ISPs already implement charging by destination (mine does) and HTTP port proxies. It isn't hard to go from there to per-port billing.

      Even better, SIP (unlike) H.323 tends to play nicer with proxies...

      Someone also mentioned routing through Canada. I seem to remember that a US carrier is already in trouble for doing just that, so I think that people will be on the lookout for that one. :)

      Regards,
      Jason Pollock

      On the flip side, has anyone considered what VoIP telemarketing spam would be like? Would the "do not call" list still apply? It would be very interesting to see a spammer initiate several thousand calls and only handle the ones that answer... No longer limited by the number of outgoing trunks...

    4. Re:Detecting internet phone calls by Minna+Kirai · · Score: 2, Insightful

      They don't need to tax the phone call per se.

      That's completely different from what is being proposed now. Taxing phone calls "per se" is exactly what they're considering.

      If they must tax the internet, then a percentage tax taken from the bill collected by the ISP would be a much better idea. That, at least, would be fair and wouldn't discriminate amoung one internet protocol or another. I don't want to see (for example) people prefering NetMeeting over VoIP or AIM over email just because one of them isn't taxed.

      Taxes are much less onerous when they are attached to an existing monentary transaction. Sales tax, hotel tax, income tax... the hurt that those things do to the payer is mainly from the actual money taken away. But taxes on something free impose many more costs- you've now got to go through all the paperwork of making a transaction that hadn't been necessary at all. (Like how the biggest irritation of tollbooths is not the money itself, but the traffic congestion from having to sit in line digging for coins)

      But if you buy the argument that web and e-mail access should be universal, then it suggests the need for some form of tax & subsidy scheme to provide that access to everyone.

      Again, that is completely unrelated to the discussion at hand. The government certainly isn't proposing a "Rural Internetization Project". There's no specific internet service they'd be funding- the tax would go towards the general fund.

  5. Google News Partner Link by NOT-2-QUICK · · Score: 4, Informative
    No registration required...

    --
    Beer is proof that God loves us and wants us to be happy. -- Benjamin Franklin
  6. Enforcement? by Dyolf+Knip · · Score: 4, Interesting

    And just how would they enforce any such regulation? VoIP is basically just a program running over existing networks. Cell phones not withstanding, you can no more require charges to be paid than you could charge for email or instant messaging. It's just a communications protocol!

    --
    Dyolf Knip
  7. Completely Switching to VoIP by Davak · · Score: 4, Interesting


    Thanks to some great suggestions by people previously on slashdot I have completely switched to VoIP for my phone service. It rocks.

    Previously I had not switched because I was scared of losing 911 service. However, if you have wire running into your house, you can still pick up and dial 911--even without service!

    So we have our emergency land-line phone--for free. Now we are using VoIP for everything else.

    However, if VoIP starts getting taxes to death, then people like me will switch to something else... and then something else...

    Can't the government just stay off these new industries long enough for them to get started?

  8. Internet as a Utility? by dmurawsky · · Score: 4, Insightful

    Well, as telephones started becoming more and more a part of daily life, the systems that they ran on became taxed by the government. I see no reason why the government won't do the same with the Internet. Let's just hope that they do it intelligently (wishful thinking, I know).

    --
    Learn from other people's mistakes, you don't have time to make them all on your own.
  9. How? by pdaoust007 · · Score: 5, Informative

    This is all nice and all but how the hell are they going to regulate this exactly? Sure it might be easy to target companies like Vonage but what do you do with all the free services out there like Skype or Free World Dialup?

  10. so what? by __aaitqo8496 · · Score: 2, Insightful

    "Federal and state governments could lose billions of dollars in revenue..." ...of which could made up if we spent an ounce less on military funding.

    1. Re:so what? by NonSequor · · Score: 2, Insightful

      There's always the option of cutting BOTH military and social programs. Have you ever considered that?

      --
      My only political goal is to see to it that no political party achieves its goals.
  11. Re:Does anyone actually do this? by brianosaurus · · Score: 4, Interesting

    Maybe you don't, but your carrier might. Qwest (or whoever) could take your analog call and digitize it at the CO, route it over IP to the destination CO, then pump it back out analog. Its cheaper for them.

    There are also companies like Vonage, who provide phone service over your broadband connection. Some of my friends recently dropped their landline and now use Vonage over their cablemodem. They pay a flat fee ($40 i think) for all calls, including long distance.

    --
    blog
  12. A question.. by KD7JZ · · Score: 5, Interesting

    Do you consider universal affordable phone service to be a social good worth paying for?

    That goal of universal phone service is possible only because of the current system of regulation. Regulation is an unfortunate term. It is really a system whereby telephone subscribers in populus areas subsidize subcribers in more rural areas. Regulation allows phone providers a consistent rate of return on their capital investment while keeping rates down for everyone.

    1. Re:A question.. by shostiru · · Score: 2, Insightful
      I consider emergency service a social good worth paying for, and I will gladly do so via actual taxes. I even consider basic phone service a social good, just as I consider basic water service, fuel, and electricity a social good, but I see no particular reason why the government should enforce subsidization of one and not the others via subscribers' bills. If a community, state, or the country wishes to subsidize any or all of them so be it, I'll vote for that (tho I have no expectation others will do the same).

      The current model, however, has the phone companies collect this tax from other subscribers, and most unlike income or property taxes it is arguably regressive. More importantly, the phone company has a large measure of control over the rate of basic service. This is usually done without effective governmental oversight as tarriffed services are negotiated between the telcos and the public utilities commissions. The decision makers in these same commissions are frequently staffed by current and former telco executives and management. I have exactly zero faith that the "tax" I pay on my phone bill to subsidize basic phone service accurately reflects what it costs to provide this service.

  13. How can they do that? by LordK3nn3th · · Score: 2, Insightful

    What stops them from "regulating" online conferencing, telephony (such as Skype), etc? That seems practically impossible unless the government starts monitoring the internet. Is it only going to involve telephones? What, really, seperates a telephone system (a traditional one) and a computer w/ a microphone?

    Oh, but of course, the government doesn't understand it's own creation-- the internet. I think we've all seen that enough already...

    --

    ---
    Never criticize religion on Slashdot. You will be modded down for "Troll" no matter how factual it is.
  14. Are they allowed to read my mail? by t0qer · · Score: 4, Insightful

    I don't know the specifics of the law, but from what I know about the FCC it was founded to regulate wide area transmissions right? Anything to do with radio that passes over public land.

    Most of the internet now is not publically owned. AOL/Time Warner has some of the nicest backbones in existance (I don't think I need to remind avid /. readers of how many times we gave those servers beatings for matrix and LOTR trailers) Either they use magic, or their network has more bandwidth than a bittorrent.

    Which causes me to say, what gives the goverment the right to go after a company like AOL if they started providing phone services to it's subscription base. As long as AOL allowed other IP telephony providers to route calls into their networks, which was the community based resource sharing it's creators invisioned, then in essence it is a wide area transmission. If a node goes out, it reroutes.

    It's a paradox. We can't have our cake and eat it too and unfortunately for most of John Q Public in the US, the goverment wants to be able to have evidence collecting power. We want privacy and we want a goverment that can defend us from scumbag corporations at the same time.

    I think the FCC is a lone tomato rotting in the sun, skin blistering with flys buzzing about it, who's smell of decomposition just barely singes your nose. Regulation did not bring the consumer choice, which is why when deregulation came about the choice in phone service providers skyrocketed.

    It's proof that less goverment involvement in phone providers results in better consumer choice. I for one am totally for letting any company do this.

    This news is sort of old hat though, since many companies i've worked for over the years had IP based telephony for connecting calls between offices. I know a lot of the insanely big (like AOL/Time warner) have to use IP traffic for their voice data. Cisco does for sure.

  15. Live Streams... by deathinc · · Score: 3, Informative

    There apparently will be several live feeds available of the hearing tomorrow for those away from their TVs.

  16. Sadly, by Hal+The+Computer · · Score: 4, Insightful

    Nothing is black or white. If there is something they can tax, they will.., as long as they don't get their heads handed to them. Many U.S. states have no sales tax whatsoever. That dosen't fit your nice little theory. Certainly not all consumer goods are taxed. Every road you drive on isn't a toll road.
    If you haven't fallen asleep yet, you might want to read an article on taxation. Accuracy not guarenteed, but hey, it's free and it's mostly accurate.

    --

    int main(void){int x=01232;while(malloc(x));return x;}
    1. Re:Sadly, by orthancstone · · Score: 5, Informative

      Only 5 states are without a sales tax rate. Yeah, that may be 10 percent but that still isn't many.

  17. Re:Does anyone actually do this? by Anonymous Coward · · Score: 2, Interesting

    The phone company does use a single phone line to connect each house/phone to the phone company. They use switching stations. Each switch station communicates to the phone company using an internet topology and protocols. Once the voice (data) reaches the phone company it is routed to either another local remote switch or put across the internet to another phone company. This is a simplistic view of the internal workings.

    Now back to your question: Who uses the internet to make phone calls?

    Answer: Everyone

    A better question: Is there going to be a better interface for making calls?

    Answer: Not much is simpler than dialing a standard phone, and getting a voice (automated or real) rather quickly.

    Now for other issues: If the phone companies see this as an improvement. Ok, that would have to be for their bottom line. Then there is a chance that standard internet would cost the same as a standard phone line. And we would use a device to make phone calls. It would operate with all the same functions. And possibly have a nice color LCD window for viewing adverts sold by the phone company.

    The cell phone companies are getting abit worried about these things. If I have an 802.11 device, and it has the capacity to make calls using internet protocols, then the only reason to pay a cell company is to ensure I am never out of reach from a cell network.

    This is changing rapidly. McDonalds is offering WIFI at every resturant. Starbucks is offering the same. Other big names are trying to get into the WIFI field.

    So there may come a time when major cities are covered by 802.11. And cell phone companies are pushed to the farms and areas without WIFI. This would be a huge dent in their wallet....

    Now all if this is going to come at a price. The inital WIFI market is already fractured. My McDonalds account does not work with with Starbucks. And the voice provider needs to be paid as well. This is where the regulation will step in. It is possible that WIFI regulation will be the result of the FCC hearings. The guise will be to save the consumers money. And it will keep the cell nodes working.

    This is just my opinion...

  18. What do current taxes do? by stienman · · Score: 4, Insightful

    IIRC, phone taxes historically were created two support the poor (as phones were eventually determined to be a basic service that should be available to all) and later to support the 911 emergency location service.

    I would be willing to support the frugal application of these two taxes to internet phone usage, except a little more broadly: 911 service given to anyone with an internet connection, and additional phone taxes to cover the cost of providing basic internet connections to the poor.

    There may be additional taxes required to regulate the industry (support the FCC a tiny bit, etc) so companies don't completely fleece consumers.

    But in the end, the reality is that phone service is so cheap, and internet service so cheap, that to complain about an additional $1/month or less in taxes is being petty.

    What? It's $7.00 per month? Well then, fight to the death for your $82/year!

    Of course the real issue is that the internet allows anyone to become a phone company overnight, even offshore, so collecting such taxes is going to be practically impossible. Best to go to the local ISPs, turn them into basic phone service providers put a small tax on the internet (flat rate per line/connection regardless of usage or bandwidth) and get rid of the concept of a 'phone company' or 'cable company'. You have connection providers and content providers. Levy the 911 and subsistance tax on the connection. Cellular providers will simply become ISPs, each cell phone a computer, the 'line' between counting as one internet connection. Each person will typically have 2-5 lines (cell, office, home, etc) Since content providers must have a connection, then they too will be taxed. Anyone can become a content provider.

    3) Profit!

    -Adam

  19. What I want to know by mcc · · Score: 4, Interesting

    How will they track this, and how will they be able to determine if people are cheating?

    OK, so they decide to regulate and tax Voice routed over IP. What about Voice routed over IP routed over some other sort of IP protocol disguised to not look like voice? What about Voice over IP routed through relays in Canada? What if two people are doing VoIP but then claiming "what, this isn't a phone conversation, we're just streaming each others talk radio streaming mp3 stations to each other."

    This could become fascinating. We would wind up with this sort of caste structure being created among internet protocols, where this stream of bytes is okay and anonymous but THIS stream of bytes, the government needs to know about it and it needs to be taxed.. just because the latter set of bytes happens to contain audio data of a certain sort. So far the internet has avoided anything of that sort; certain classes of *content* have been differentiated from one another in a regulatory fashion, but never before a class of *data*.

    Soon we may wind up with something where the proverbial "Joe Sixpack" pays relatively high fees on his Skype phone he bought at Wal-mart and plugged into the wall, while all the "techies" pay nothing to use their "alternative" VoIP setups. Meanwhile a bizarre cat and mouse game goes on, as the authorities complain about "speech piracy" and attempt to find ways to sniff out VoIP data or prevent "pirate" VoIP programs from connecting to the larger VoIP network, and the tech community comes up with increasingly elaborate ways to keep the authorities to notice what sort of data exactly it is that they're sending.

    In the meanwhile, the ongoing effort by router companies to make "smart" routers capable of identifying things like streaming media packets and handling them in a slightly more intelligent manner is scuttled-- because 80% of all streaming audio data no longer looks like streaming audio data.

    Anyone have a link to the RAT_PENIS.TXT story?

    --
    Irritable, left-wing and possibly humorous bumper stickers and t-shirts
  20. Questions about efficiency, bandwidth... by wskellenger · · Score: 3, Interesting

    Can the existing network infrastructure handle the additional bandwidth that would be demanded, if significant, by VoIP?

    How exactly does all of this work? It seems like the existing analog infrastructure would remain in place. After all, asking everyone to replace their existing handsets isn't going to happen anytime soon. Now the phone company will A/D my speech, then send it out directing it to another server local to the number that I dialed, which will D/A my speech and reproduce it for the ear of a person in another home?

    If the above is true, it seems that it would make sense for some additional offering from the phone company that would eliminate the A/D portion of the communication and the phone line to your house would become a broadband connection. Make the handset perform the Voice-->IP conversion with embedded software, and I can ditch my dial-up ISP...

  21. Re:Does anyone actually do this? by FunkyRat · · Score: 2, Interesting

    Well, from your prospective it shouldn't make a difference, other than with all the major phone networks either moving or having moved to VOIP, you should be seeing a large reduction in your phone bill -- at least for your landline. The phone companies are certainly seeing a large reduction in their expenses. The problem is, the phone companies are still charging you as if they were running their same old switched networks. Here's an article by Clay Shirky that explains this arguement much better than me.

    On top of the phone companies' price gouging (IMHO), you are literally being soaked in federal, state and other fees and taxes. For instance, for my landline I subscribe to Sprint's Complete Sense Unlimited plan which gives me unlimited local and long distance (within the U.S.) plus a bunch of goodies for about $50 monthly. Yet my monthly bill often runs about $65. That additional $15 monthly is certainly not from using directory assistance (which is not about $2 a pop for me) or goodies not included in my plan. While I don't begrudge the 35 cents for E911 service and maybe I wouldn't begrudge the taxes either if I thought they were going to pay for something worthwhile instead of stormtroopers shooting and gassing innocent people in Florida. The FCC fees I feel are a complete rip-off. Either way, nearly 30% taxes and fees is outrageous!

    Right now I am considering switching to Vonage for my landline. At $35 monthly for the same type of service plan I get from Sprint, and no added fees I think I can deal with any of the annoyances that might come with it. Now if I could find a good alternative to Time-Warner Cable for my broadband.

  22. Underlying technology is surely irrelevant by EmbeddedJanitor · · Score: 2, Interesting

    When telephone calls went from copper to fibre did the rules change? No. So why should the rules change because the calls are going over IP?

    --
    Engineering is the art of compromise.
  23. hm by machine+of+god · · Score: 2, Insightful

    Well lets see. Technically they're only charging fees so that they have the ability to do their regulation thing right? But they don't need to regulate. So why do they need the fees?

    (I know the answer, I'm just making a point)

  24. Re:Does anyone actually do this? by squiggleslash · · Score: 2, Interesting
    Actually this just covers what Vonage et al does. As long as a call terminates on two POTS lines, it is already covered by existing long distance rules, regulations, tariffs, and fees.

    The issue here is that some companies, such as Vonage, are bypassing the "last mile" by providing service over a (differently regulated) Internet link instead. This screws up the service funding model which has traditionally used termination charges to subsidize/contribute-towards local service and fees levied on long distance companies who use termination services to "tax" (such as to fund the Universal Service Fund.)

    It's a big can of worms, and rather more complicated than your average Slashdot psuedo-libertarian of the "Boo, big gubmint is trying to find new ways to tax me" type would like to admit.

    --
    You are not alone. This is not normal. None of this is normal.
  25. Let your voice be heard! by spiritraveller · · Score: 2, Informative
    Monday's forum is open to the public and there's going to be a webcast too.

    Those of us who feel strongly about this should watch the webcast or attend in person. Be sure to submit your comments to the FCC afterwards.

    It's your government. If you think regulating VOIP is a bad idea, let it know.

    Usually, only the big companies and their lawyers take part in this process, but we all have the right to take part and let our opinions be known.

  26. Re:Does anyone actually do this? by AKnightCowboy · · Score: 4, Informative
    Qwest (or whoever) could take your analog call and digitize it at the CO, route it over IP to the destination CO, then pump it back out analog. Its cheaper for them.

    How do you think they do it right now? Lily Tomlin is sitting in your CO in front of a huge switchboard plugging in wires? The telephone network is already packet switched. Putting it over IP doesn't necessarily make it any cheaper. If anything it'll make it less reliable. You'd be going from a protocol that's specially designed from a QOS perspective to a best effort protocol.

  27. I said this before and I'll say it again by melted · · Score: 4, Insightful

    They either should remove taxes from my DSL bill OR from phone bill, because right now I pay two sets of taxes. They're trying to eat with two spoons, and this is not the prettiest way to eat, especially if someone feeds you. The fella giving you money may decide you're too greedy and cut off your food supply for good.

  28. This is so not right by Anonymous Coward · · Score: 5, Insightful

    http://www.washingtonpost.com/wp-dyn/articles/A200 32-2003Nov28.html

    This is insane. Telecommunications carriers routing phone calls over the internet. This article doesn't even touch upon several issues.

    1) Local companies can deliver long distance service (by passing Federal Regulation).
    2) Quality of service.
    3) Higher rates
    4) More profits for the Telco's and higher rates for users.

    Let me illustrate. The fees on your bill pay for the telecommunications infrastructure, in part by flat fee on your bill, taxes and some gets taken from each phone call. Now based on this premise, all companies will be routing over the internet. The possible/probable affects will be:
    1) distortion on phone calls because traffic is high on the internet.
    2) broken speech on calls
    3) try calling 911 and have your speech broken up so that the other side cant hear you.
    4) higher rates for everyone. Guess what, we all have to pay for the telecommunications network. Now the gov will not be making as much money for supporting the network. To maintain it their will be a raise in rates. Guess who's rates are going to be raised? Flat rate, taxes and per call usage. But what about all the money that the Telco's are making from this cost savings maneuver? That cannot be touched because it was not made on the regulated side of the house.

    Now the telecommunications companies will not be governed by the FCC on phone calls. The FCC is the guardian that keeps the Telco's in check. Now there will be no check. Great, unregulated telecommunications companies.

  29. Give me your money by anti-tech · · Score: 3, Insightful

    I do not know how the government will tax this, but I am certain that it will not be well thought out or fair. It will be decided by who gets the most money and/or has the best lobby. In both cases, the average citizen will lose. This is how capitalism works: extract the most money you can from everyone. Kind of like a vacation at Disneyland without the fun.

  30. Example VoIP architecture by N7DR · · Score: 2, Interesting
    One reads lost of well-meaning posts about VoIP here on /. Not all of them are very accurate, however, and many of them simplify (or even trivialise) the notion of doing telephony over IP to the point where the reader can easily come away with conclusions that are incorrect.

    I would recommend that anyone who is interested in understanding the intricacies of providing a telco-equivalent level of service to a residential user in an IP environment should take a look at the specifications at www.packetcable.com/specifications/. PacketCable(TM) is the cable industry's set of standards for providing telephone service over broadband. As you will see, doing VoIP properly is not quite as simple as some people seem to believe.

    There are (of course) other ways of doing telephony over IP, but this set of specifications is free and easy to download, and the documents do give the interested a reader a good idea of the kinds of issues that have to be addressed.

  31. One practical problem ... by jc42 · · Score: 4, Insightful

    VoIP is just a TCP connection, right? So in general is it even feasible to regulate (i.e., tax) VoIP separately?

    If so, this brings up the interesting question of regulating other kinds of TCP traffic. Given things like VPN and SSH, it can be exceedingly difficult to even discover what sort of traffic is carried on a TCP connection. If my employer requires that I set up a VPN link to work, and I happen to have a phone plugged into my computer that uses the VPN to make work calls, how do the regulators measure my use of VoIP. It's just some portion of those encrypted packets going over the VPN connection, but that packets also include my vi sessions, rsyncs, ftps, and all the other things that I do as part of my job. Does this proposal mean that I'll be paying voice-line rates for my all-day VPN connection to work?

    You might think that a wireless VoIP phone would be an exception that's easy to regulate. But my current cellphone is also a Palm Pilot, and I can and do use it for web access. Currently, voice and http on this phone use different low-level protocols, so they can measure them separately. But with VoIP, the voice and http connections are just TCP. I also work with databases, and much of that work is voice-like in that it has bursts of data alternating in both directions. Will this have the characteristics of VoIP, and thus be regulated/taxed as phone usage?

    One possibility is that we'll suddenly find that all TCP connections are considered "voice" and charged extra. But we can probably all imagine the outrage this would produce - especially from people running commercial web sites.

    Anyway, it'd be interesting to hear how they're going to sort out the voice sessions from the data sessions, when they're all just TCP connections.

    --
    Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    1. Re:One practical problem ... by YetAnotherDave · · Score: 3, Interesting

      minor detail: voice data is passed via RTP, which uses UDP, not TCP. Retransmission of voice data is generally not worth the effort, so the lighter-weight UDP protocol is more efficient...

  32. The issue is hottest where VoIP meets the PSTN by isdnip · · Score: 2, Informative
    The FCC really has no interest in regulating VoIP per se. A telephone call between two IP nodes (computer to computer) is simply not of interest to them. It is competition, sure, but that's okay; they're supposed to support competition. They generally don't, but they're supposed to.

    Here's Chairman Mike "the lesser" Powell on the subject, from http://hraunfoss.fcc.gov/edocs_public/attachmatch/ DOC-241750A1.pdf

    And I think the first thing is to truly commit ourselves to understanding the technology
    and the market and the nature and the way in which it's unfolding so that we're not fearful --- we
    don't approach this with fear, but we approach it with excitement and optimism that this is
    inherently a good thing for the world, a good thing for the country, a major breakthrough in
    telecommunications and communications, and a great new opportunity and promise. We shouldn't be afraid of that.

    I personally think we should be embracing it. And so I think that that's an important part of the debate. And so we're very excited about it.

    I have decided that the Commission is now going to start exerting itself in this area much more directly. And that is not to say regulating it either, only to put a marker down that it's time to start having these policy questions in forums that matter. I really don't. And I think that we
    run the risk that if we don't move quickly to at least show that we're focused on it, then if you
    don't have a state jurisdiction do it, you will have a court do it.


    There are some big issues still unresolved. The current FCC policies, which are largely supported by the language of the Telecom Act, classify calls made through regulated local telephone companies (VZ, SBC, etc.) as "telephone exchange service" (basically, local) and "exchange access service" (basically, end legs of a toll call). Those have different prices; LD carriers usually pay more for "access". VoIP is sometimes used as a way around that. So it threatens that subsidy mechanism, which is particularly important for rural telephone companies.

    So the big questions focus on when does a VoIP call become long distance "access" rather than "local" or ISP-bound "exempt information access" (ISP access dialup calls, for now, are legally classified as not local. but telcos are usually required to treat them as if they were). And if VoIP calls are exempt, when is a call exempt? If AT&T sticks IP headers on the middle of its LD trunks, transparent to the user, does it become exempt? If the trunks are dedicated VoIP circuits? If the calls sound crappy enough?

    I'm not sure the FCC is going to come up with any great answers in a hurry, but they have enough problems figuring out what the telephone companies can charge VoIP users without having to worry about messing around with Internet user traffic.
  33. Re:Does anyone actually do this? by calstraycat · · Score: 2, Informative

    You are both right and wrong. No, Lily Tomlin is not sitting a manual switchboard. However, the public telephone network is not packet-switched, it is circuit-switched. With very few exceptions your calls are routed using a Class-5 circuit switch. The phone companies are doing trials using packet-switched calls, but the vast majority of switching is done the "old fashion way".

    Even the DSL data service is transported and switched using Asynchronous Transfer Mode which cell-based and not really considered packet switching. Most of the installed equipment doesn't even support QOS. The truth is that packet switched networks are the wave of the future, but they currently do not provide the quality of the existing network and it will be quite a while before you see the Babybells completely abandon their huge investment in circuit-switched equipment.

  34. Telecom Regulation by Aaron+M.+Renn · · Score: 3, Insightful

    I'm sorry, but if traditional telecom is subject to regulation, VOIP ought to be as well. The current regulatory scheme is set up, to some extent, to use local line charges to subsidize other services, in returns for some profit skimming. If we allow VOIP to bypass the local loop for high margin service (e.g. eliminating access charges for LD calls), then we need to rethink regulation.

    When your significant other (or you for that matter) has a heart attack, you want to pick up that phone and call 911 and expect someone to pick you up, not to hear that, sorry, there is network congestion or a DDOS attack on the local router. Somebody has to subsidize telecom services for the poor. Etc.

    It is certainly not fair to saddle traditional telecom with burdensome rules while exempting new players. At a minimum, the old players ought to have their regulations lifted. Of course, the slashdot crowd doesn't want that either. That would mean they would be exploiting their monopolies.

  35. They will, they will... by Anonymous Coward · · Score: 2, Interesting

    The original poster very clearly said "they will", not "they do".

    Many U.S. states have no sales tax whatsoever

    Wrong. Not "many". Very few. Six or less, I believe. And I'm not aware of anything that prevents the state from imposing one in the near or distant future, or the federal government from imposing a federal sales tax. Name a state that has removed a sales tax. Okay, now name the states that have added them over the years. It's pretty clear what they will do, given a little time.

    Every road you drive on isn't a toll road.

    The trend in every state is generally moving towards tolls on roads. The big ones, the busiest ones, and the most expensive ones will come first, obviously. And perhaps heavy users or commercial users are hit first. But it all trickles down. Do you know of many roads that have had tolls added over the years? Okay, now do you know of many roads that have had tolls removed? Tolling roads is a clear trend, in all states. Technology only helps administrate this. Why don't they toll the smaller roads? Infrastructure too expensive. Would they if they could impose a low, fair price and you only paid for the miles you used? Damn straight. Is the technology there that lets them do that? Almost.

    If there is something they can tax, they will. Just give them a little time...

  36. Rural Myth by yintercept · · Score: 3, Insightful
    Right. And note that, without regulation, there would never have been telephone service in many rural areas (and in some parts of some cities).

    Quite frankly, I think the subsidies for rural telephone is a myth that AT&T perpetuated to keep its monopoly. "We need a monopoly so we can rob Peter with the justification of maybe paying Paul."

    Farming is big business, if there was not a subsidized monopoly, you still would have seen a large number of rural cooperatives, and probably a faster evolution of telephony. In the end, the massive AT&T monopoly was proved overall setback, not a great leap forward for communication technologies.

    Regardless of our interpretation of history, I think the wide number of options for rural users makes subsidies even worse. Farms are better served by wireless. There is less maintenance, they have the open bandwidth in the country, and it is more useful.

    Costs of routing have dropped so dramatically, that the current tax structure costs more than the service, yet the government is addicted to taxes and will regulate just to collect taxes. They will justify their actions with anti-market myths like the rural phone gap. Don't give in to the game.

    PS: If living in the city is more efficient, shouldn't we be encouraging people to live in cities. taxing city folk to give money to country folk ends up creating a market inefficiency.

  37. Using their own evidence... by Eese · · Score: 2, Interesting

    They say that state and federal governments will lose tax revenue on these phone calls... But they also won't need that tax money to maintain the system that governs the older phone systems. Of course, my arguments assumes that almost everyone will switch over to phone calls via the Internet, but their argument also admits that enough people to warrant a change are already doing it.

  38. Oh, my! by Fantastic+Lad · · Score: 2, Insightful
    Oh my!

    Modded into the ground for speaking the truth.

    I'll repeat my devastated post for those who would like to see it. . .

    I have only one thing to say. . .

    GREEDY BASTARDS.

    Oh, and. . .

    Are people 'terrorists' if they become sickened with corporate/government leeches? Of course not, but that won't stop the Powers That Be from getting nervous when the masses start to steam with indignation. This is the reason for the push to remove freedoms and create a police state; fear of reprisal from the masses who are getting hurt and bled worse every day. This, and nothing more. Anybody who believes otherwise is a chump.

    Now. . . Please, if somebody would like to actually disagree with this. . . I would love to hear their 'logic'. As I see it, there is no rational defense of the corporate/government desire to tax and bill the bejeezus out of people through needless charges and needless regulation. And anybody who believes that the 'terrorist' nonsense is actually what it is being sold as, is a damned, damned fool.

    But then I don't expect a whole lot of rational thought around here. Fear and Ignorance? Sure, but Rational Thought is a rare bird in these parts.

    Self-deluding Cowards afraid to look at the world objectively disgust me.


    -FL

  39. Regulators, telcos should step carefully... by bthomasmo · · Score: 2, Interesting
    If anything has become clear to me over the past fifteen or so years, it is that most or all of the telecomm regulation should be tossed as soon as humanly possible. All such regulation was granted in exchange for monopoly status, which is no longer even possible; indeed, such regulations as UNE-P are actually delaying true competition, because neither the incumbents nor the competition have any incentive to build out their networks.

    With inner-city phone customers paying up to three times as much for basic service as their suburban neighbors, there is no sane argument remaining for the universal service fee structure.

    When some ISPs took advantage of the access-fee legislation to put up modem banks and realized ROIs in the 400-500% range, it became painfully obvious that regulating the industry was bound to continue to fail in its objectives due to ever-present unintended consequences.

    The most dramatic effect I can see coming out of regulating VoIP is hastening the demise of the public switched telephone network. Since the only value proposition offered by VoIP-as-service is quality guarantees and PSTN access, it will not be competitive with regular phone service any more, and bypassing the LD providers will continue to be possible by using direct IP-phone to IP-phone, which can't be regulated, carries no incremental cost to those already equipped with broadband access, and will continue to push PSTN rates up due to the loss of LD subsidies. The positive-feedback loop involved means that it is inevitable; we will see the trend accelerate as more standardization of protocols results in more network-effect value, more cheap phone devices equipped for direct Internet connection, and local phone service rates going up. Every one of these trends is already in progress and irreversible, and they all build on one another.

    I know by painful experience not to try to predict when these things will happen, but they will happen, and soon. If my predictions were accurate, it would already have happened five years ago. But the basic economic fact is that it costs orders-of-magnitude less to provide communications using a ubiquitous packet-switched network, and only government regulation can slow it significantly, and in the current case may actually accelerate it dramatically.