FCC Regulations of Voip Term Paper

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Voice over Internet Protocol, also known as VoIP, converts voice signals into data packets and transmits them over the Internet. VoIP services still stand on the cusp of being included in the list of services to be regulated by the Federal Communications Commission (FCC). As is well-known, the public switched telephone network has been under the scrutiny of the FCC for the latter part of it's existence. This paper will explore if a similar approach can be taken for VOIP, this form of telecommunications through information services, and what the ramifications of such an approach will be. Many contend that VOIP is the future of voice transmission, with potential improvements over voice clarity and reducing costs of transmissions. This is preceded by the traditional method of voice transmission that is through towers that aggregate and distribute signals, and cables and wires that transmit signals. VoIP services over the world have been gaining traction, and this has been particularly true in the United States. Over the past decade, there has been a surge in the popularity and usage of VoiP for everyday communications; a PEW study corroborates this fact, showing that more than half of all American businesses use it for their communications. One of the main reasons for the increasing rates of adoption is the relatively low costs of both domestic and international calls, and mobile applications that facilitate VoIP calls. Due to the sudden surge in popularity, VoIP has come under the scanner of the FCC. When it started out, VoIP was categorized under the Internet Technology segment, rather than Telecom technology, which is its true function. This has led to VoIP being exempt from the taxes and regulations that regular telecom carriers like AT&T and Verizon are subject to. The sole reason that VoIP has not been subject to these regulations is that the FCC has till now been unable to precisely define, and consequently tax this technology of the future (Barbagallo).

The FCC seeks to regulate data service providers with three segments, where telecom providers fall under the Title II of the Communications Act, wireless carriers under Title III, and cable operators falling under Title VI. But now each of these providers overlap with each others, and the FCC definitions are fast proving to be redundant. These redundancies seem to offer a business advantage to certain carriers over the others. New players in the market who offer phone services over the internet, do not need to pay heed to the rules that the older players who are still dependent on traditional methods of data transmission. Companies like AT&T and Verizon need to offer their services to all residents. This is mandated under state law, as is meeting standards for dial tones, a confirmed connection, and staying connected in times of adverse environmental conditions. The new players are not bound by these conditions (Barbagallo).

Analysis

The NCTA is the National Telecommunications Cooperative Association). They represent rural telecom providers, and they have filed a petition last year. They want for the FCC to make a rule, which allows for the examination of a means of promoting and sustaining the improvement of the public switched telephone network into an IP based infrastructure through means of custom-made economic incentives. These incentives would allow the phone companies to cover for the costs of carrying IP traffic on their airwaves. These incentives would also facilitate adequate universal support for providing service support for taking broadband internet service to rural America.

On the other hand, AT&T has petitioned that the FCC must establish test zones where none of these old regulations must apply. They also want for VoIP networks to be subject to minimal regulation only at the federal level (Wise, 2913). Their main bone of contention is that any form of regulation of the interconnection between VoIP services would be excessive and potentially harmful. They also go far as to state that FCC lacks the needed authority under the Title II of the communications act, to bring under regulation any interconnection between two ISP entities, which are classified as information services -- the same category under which VoIP falls (Wise, 2013). However, an pro-regulation advocate has contended that any exchange carrier, regardless of the interconnecting medium, are bound by the duty to carry out negotiations for interconnection agreements in good faith (Wise, 2013).

A large portion of the members of Congress, with S. Rep Chip Pickering at the forefront, have impelled the FCC to declare themselves as the ones with the sole jurisdiction to regulate VoIP services.

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The lawmakers had written a letter to the Chairman of the FCC, Michael Powell, stating that VoIP services cannot be subject to a patchwork of state rules and regulations, as they are inherently interstate in nature (Mark, 2004). Pickering sought to argue that VoIP is the future of telecom communications, and the end benefits would stay with the consumers in terms of advanced services and reduced costs, as VoIP grows in efficiency. He went on to reaffirm that VoIP is clearly interstate in nature, and must hence be subject to the sole jurisdiction of the FCC. In an effort to provide jurisdictional and regulatory clarity on the subject, he wanted for the FCC to expedite their ruling on the subject (Mark, 2004).

While all this has been going on, the FCC has not been dormant. They are currently in the middle of conducting a study on VoIP. Pickering and Sen. John Sununu have already introduced legislation that seeks to exempt VoIP services from carrier access charges, state taxes and local regulations. If these were to be passed as a bill, it would render the FCC unable to delegate regulatory authority to state and local officials; however this legislation was stalled from being passed. (Mark, 2004). This legislation was a specific request, to expedite a ruling pertaining to Vonage, an independent ISP, who had requested to be classified as an interstate information service, akin to services such as e-mail. If that had been passed, it would have put VoIP beyond the tax and regulatory reach of the states. This petition in particular, would have put VoIP services under the sole jurisdiction of the FCC, regardless of the fact if the service traverses the public internet or privately managed IP networks, because they would be interstate in nature. They have announced in December that an inquiry would be launched whether regulations would be needed for the VoIP sector, whereas the FCC has stated repeatedly that they would use only a light regulatory approach (Mark, 2004).

The FCC has already exempted Free World Dialup by Jeff Pulver in its VoIP review. The free calls that customers make are routed entirely over the internet, and never touch the public switched telephone network, so they have seen fit to exempt it from state regulations. Using only their broadband connection, users of this particular service can talk to each other through their computers. But in sharp contrast to lax regulations, the FCC believes that VoIP must also come under the wiretap laws that apply to traditional telephony (Mark, 2004). This puts VoIP providers in the same position of having to comply to laws that telephone carriers currently do. In addition to that they also have to comply to regulations regarding to emergency services and contributions to the Universal Service Fund.

Old-school telecommunications providers such as Comcast and AT&T are not in line with the nationwide Wi-Fi plan, which poses a serious threat to them. They do not want to lose their business to free services which include VoIP, with the wireless industry purported to be worth about $178 billion. These seek out technicalities like the difference of definition premise -- for traditional players; VoIP cannot be sustained over a period of time by being given away for free. But for the new players, improving internet infrastructure means reduced long-term costs (FCC Eyebals VoIP Service).

Implications:

The infrastructure that VoIP depends on to transmit its data is not unique to only itself. The service bears no direct relation between itself and the physical infrastructure it runs on. This means, in the absence of proper encryption, anyone can access this transmission and damage or corrupt it based on their will. To provide privacy to their end users, VoIP have to provide a level of encryption that may not be completely fool-proof, but provides a level of privacy on par with regular telephony. However, it will prevent authorities from lawfully tapping the VoIP communication. This is a complex problem requiring a delicate solution. This problem is not unique to VoIP, these kinds of security issues will threaten to bog down internet services in the future. Also, asking VoIP service businesses to provide batteries for each customer for SOS services would add an undue amount of capital cost to the VoIP providers, and will make the reach of the services to rural areas very slow. In addition to all this, the environmental costs of supplying and maintaining power supplies are staggering. The debate continues whether this….....

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