FCC VoIP hearings Monday

[Chris Peabody <>]

I talked with Wendy Wiggens from Educause last night - we were both down at the FCC VoIP hearings on Monday.  Chuck Wolfe, GU's Sr Network Egr attended with me.

Wendy agreed that I could forward her notes that she sent to the Net@Edu ICS team on to others groups, along with my thoughts regarding the second session.

I'm also forwarding the article from the Washington Post, which you may have already seen. Sorry for the length.  The meetings overall were fascinating.


Wendy's notes from the AM Session

All the Commissioners were present

Panel #1:
Kevin Werbach (Supernova)
Charles Giancarlo (Cisco)
Jeff Pulver
John Hodulik (UBS)
John Billock (Time/Warner)

 Each of the commissioners gave an opening statement, major points:

• VoIP will eventually be “everything” over IP. Regulation must take into account that data is data whether it is voice, video, text, etc. FCC must look at the “big picture” of a fundamental change/merging of communication systems. 

• Inherent problems that must be solved:
• Department of Justice and FBI: how to comply with CALEA (Communications Assistance for Law Enforcement Act)
• Universal Service Fund: how to provide (and fund) equal access
• Emergency Services: how to provide services i.e. 911
• Consumer Protection
• Stable market environment: how to provide guidance and help businesses make the transition
• VoIP is different than traditional phone service and must be approached differently (general agreement)
• VoIP is an application and therefore “outside” the transport system
• Presents a new economic model based on bandwidth and services, not time and distance (traditional model); revenue base will be dependent on broadband access
• Three basic service models that can use VoIP:
• Computer to computer (never enter the circuit switch system)
• Computer to traditional phone (transfer at some point to circuit switch system)
• Traditional phone to traditional phone (originate and end on traditional circuit switch but travel over internet) 

• Principles guiding regulation decisions: (Powell)
• “First, do no harm;” keep the system as market-driven as possible
• “Up to those wanting regulation to prove they are needed”
• Avoid piecemeal solutions: Federal level “light-touch” policy is goal

Summary: The time is right for the FCC to take this up. The technology has proven itself and there are policy problems that need to be addressed at the federal level to provide the stability and uniform legal environment necessary for further innovation and growth. The preference is to regulate “lite” if at all. The old telecom regulations do not translate to VoIP.  It demands a new perspective. The traditional regulatory categories of telecommunications, telecommunication services, and information services will increasingly become indistinguishable and therefore useless.

Peabody Comments/Additions to the AM Session:
-The Commissioners mentioned the Internet Policy Task Force and how valuable this group has become in advising the FCC on issues like VoIP
-It was mentioned by several people that VoIP is, and has been embedded in our world in multiple formats - So VOIP is not new. VoIP has been embedded in Video Conferencing for years, it's in Microsoft's Xbox product, Windows Messenger etc.....

Peabody Comments on the PM Section
This session focused on VoIP and Public Policy issues.  Attending-
-All Commissioners
-Michael Gallagher / Dept of Commerce
-Carl Wood, California PUC, and Assn of Regulatory Commissioners
-Charles Davidson, Florida PSC
-James Crowe, Level3
-Tom Evslin, ITXC (and the VON Coalition)
-Jeffrey Citron,  Vonage
-Dr. Gregg Vanderheiden, U of Wisconsin

Overall: The comments of almost all the panelists mirrored the comments from the morning panelists that VoIP should be "lightly" regulated and allowed to grow.  Everyone agreed that it should not be "unregulated", but that clearly the old rules for RBOCs and CLECs were not applicable.  It was also widely agreed, that VoIP was clearly an interstate/borderless service and therefore would be doomed if each state were allowed to try and regulate this independently, therefore, the work that the FCC was doing - was vital - and must be concluded quickly.  There was some good dialogue regarding closed systems (like Pulver's Free world dial up) versus open systems that interconnect with the public switched telephone networks.

• Gallagher noted that Commerce (NTIA) was interested and anxious to work with the FCC on these issues. He represented that a "light touch" seemed to make sense.  He also noted that Commerce had installed a part of their building with VoIP phones.
  

• There was a very interesting disagreement between Carl Wood (California) and Charles Davidson (Fla) on the role of the states in VoIP.  
• Wood was wearing two hats, his California PUC hat and his Assn of Regulatory Commissioners hat.  Wood was part of the the California Vonage decision several weeks back, which concluded that Vonage is a telecommunications carrier and needed to pay into all the various state funds.  He began his talk by stating that after listening to all the comments from the morning meetings that he wish he'd was giving a different talk, but that he was going forward with his talk as planned (sounds like he was swayed by much of the dialogue).  He did share his concerns about the rural carriers, who depend heavily on inter-carrier compensation.  He was clearly an advocate for "more control/regulation" of these new carriers that interface with the public switched network (as opposed to the private closed networks like Jeff Pulver).
• Charles Davidson, appointed by Jeb Bush in Florida, was a staunch supporter of "hands off" - and advocated that in Florida, this was their position.  This was starkly different than Carl Wood's position.
• James Crowe felt that it would relatively easy for the FCC to craft rules to lightly regulate and foster the advancement of VoIP - based on their experience over the past decade with the wireless (cellular) industry.
• Tom Evslin's is CEO of an IXC that carries a large volume of VoIP traffic internationally.  He also was representing the newly formed VON coalition.  He was a passionate advocate for hands off.
• Jeff Citron of Vonage cited the fact that his company has added 70,000 + users (I think) in a very short time   - he also represented that inactivity by the FCC on these issues would not help this new business model, rather it would further delay innovation and progress.
• Dr. Gregg Vanderheiden is a champion of telecommunications disability issues and noted that it's vital that this communities issues not be left out of the considerations of the FCC - and that several VoIP vendors are making products (he noted Cisco and Avaya) that greatly help the disabled community.

Final comments on the afternoon session: I thought that Charles Davidson from Florida summed up things pretty well.  He indicated that the FCC should separate out the Public Service/Life Safety issues from the Economic issues. Public Services issues should be regulated (lightly and perhaps with new rules) and economic issues (especially the rules in place for legacy RBOC's and CLEC's) should be avoided.  He noted that-

-E911 / Universal Service / Calea / Disability -  all need to be regulated to ensure that these important components of telecommunications service continue
-Access charges / Intercarrier Compensation issues / Subscriber line charges etc.... are very problematic in the existing TDM world, and should not be introduced or regulated in the VoIP world.

CBP



washingtonpost.com

Powell Opposes Internet Phone Regulation
Government Interference Could Stifle Developing Technology, FCC Chief Warns

By Christopher Stern
Washington Post Staff Writer
Tuesday, December 2, 2003; Page E05

Federal Communications Commission Chairman Michael K. Powell warned against regulation of telephone calls that travel over the Internet yesterday, saying government interference could stifle the development of a still evolving technology.

"No regulator, either federal or state, should tread into this area without an absolutely compelling justification for doing so," said Powell, at an FCC forum on the issue.

Powell's statement was directed largely at state regulators who have been attempting to assert their authority over the Internet telephone technology.

During the last year, several companies have sprung up that allow users to place calls over the Internet for a fraction of the regular cost. The Internet calls are cheaper in part because users do not pay state or federal regulatory fees. In some areas those fees add up to 20 percent of a monthly phone bill and raise billions of dollars for state and federal coffers.

Yesterday's forum marked the first public effort by the agency to grapple with an issue that is already threatening the future of a 100-year-old regulatory regime. It was convened, in part, as a response to efforts by state officials in Minnesota and California to regulate Internet telephone calls.

Like Powell, Commissioner Kathleen Q. Abernathy expressed concern about the actions of the state officials. "This commission must play a leadership role," said Abernathy.

But California Public Utility Commissioner Carl Wood argued at the forum that regulators have an obligation to oversee telephone services, whether they travel over traditional lines or the Internet.

"The advent of [Internet phone calls] does not in and of itself exempt it from telecommunications regulation," said Wood. He added that the National Association of Regulatory Utility Commissioners voted earlier this month in favor of regulation of such services.

The technology has been around for almost a decade, although until now, it has remained relatively obscure.

Major telecommunications companies including AT&T Corp., Qwest Communications International Inc. and SBC Communications Inc. already provide Internet phone services to businesses. In the last month they have announced plans to roll out similiar service for residential users.

The telephone companies are attracted to the Internet in part because they view it as a way to slip free of the regulatory regime that covers their standard networks. But moving calls over to the Internet is also cheaper and more efficient. Major cable companies such as Comcast Corp. are planning to introduce their own Internet telephone services in the next year and a half.

While Powell urged regulators to refrain from regulating calls over the Internet, he did acknowledge that there are several issues the FCC must still resolve.

Law enforcement agencies, including the FBI, have expressed concerns about their ability to listen in on conversations conducted over the Internet. In addition, Internet telephone companies are also struggling to make their systems compatible with the emergency 911 system. Finally, there is also concern that the growth of Internet telephone service could reduce revenue for the Universal Service Fund, a $6 billion annual program, paid for by fees on most phone bills. The fund subsidizes the cost of telephone service in poor and rural areas.

Powell expressed optimism that the issues could be resolved without imposing heavy regulatory burdens on the technology.

© 2003 The Washington Post Company

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