FCC VoIP RULEMAKING COULD ROUSE STATE REGULATORS, WCA LAWYER SAYS

SAN JOSE -- Most state regulators have backed off making VoIP policies pending FCC action, but if they see the forthcoming Notice of Proposed Rulemaking (NPRM) as hostile they could rev back up, Wireless Communications Assn. counsel Paul Sinderbrand said Fri. The issue is the hottest in telecom policy, he told the group’s annual technical symposium here, but answers are few. With the NPRM’s issuance, “we're going to know a lot more real soon,” he said.

Some govt. rules will emerge, Sinderbrand predicted: “There is inevitably going to be some regulation.” Companies must take the costs into account: “Regulation usually isn’t cheap, and you've got to factor this in” to business plans, he said. But the level of regulation is “almost certainly going to depend on which type of VoIP you're offering.” Co- panelist Ken Figueredo, an Analysys consultant, listed several flavors: Do-it-yourself, like Skype; broadband ISP- provided, such as cable telephony and Japan’s Yahoo Broadband; service-provider independent, a la Vonage; and internal use by carriers or corporate customers.

At WCA “we like VoIP,” Sinderbrand said: “We want to see VoIP promoted,” but its Govt. Relations Committee hasn’t taken a formal position. The VoIP issue heated up because maturation of the technology combined with broadband penetration turned it into “not only something my teenage daughter might be interested in, but something my mother might be interested in,” Sinderbrand said. Consequently, “there are billions of dollars in taxes, fees and charges at stake,” he said.

The key divide is between the “technological neutrality,” or “walks like a duck,” school, which classifies much VoIP as a telecom service subject to state and federal regulation, and FCC Chmn. Powell’s camp, which sees it as a computer application and seeks a regulatory “light touch,” Sinderbrand said.

It’s important not to overgeneralize among the VoIP types, consultant Figueredo said: (1) Do-it-yourself (DIY) is largely free but doesn’t intersect the conventional phone network. Complications will confine use mainly to hobbyists and limit the hit on telecom industry revenue. (2) Service from independents does “interface the PSTN.” It’s pushing service innovation, such as with virtual numbers usable anywhere and the option of having an incoming call ring all of one’s phones. But barriers to entry are low, and dependence on intermediaries makes service quality hard to assure.

(3) ISP offerings typically are bundled with Internet access. Providers can guarantee quality by moving calls to proprietary networks from the Internet. On the booming Japanese services, on-net calls are free and others cheap, but low-cost competition from incumbents could be a big threat. (4) Internal corporate use is economic at “greenfield sites” and has started being taken up. Many potential customers worry about resilience. The business offers opportunities for nontraditional vendors -- IT service outsourcers and IP equipment makers. (5) Carrier VoIP calls are transparent to users and service isn’t necessarily bundled. But local concentrators and switches must be transformed completely, and it can take many years for a carrier to start service.

For incumbents, the first 2 types are unfortunate and the 3rd worse, Figueredo said. He said corporate VoIP was very good news for them, and their own use even better. For entrants, DIY is neutral and the others good -- with service provider VoIP especially promising and the independent provider variety best, he said.