FCC to develop rules for internet phone calls

The Federal Communications Commission (FCC) on Feb. 12 moved one step closer to resolving whether voice-over-IP (VoIP) services should be subject to the same regulations as traditional telephone services. The ultimate outcome of the debate could have significant implications for schools and colleges, as VoIP services continue to gain popularity.

In a split decision issued Feb. 12, the FCC ruled that voice communications transmitted entirely online should remain free from regulation. The ruling applies only to services that allow users to place calls to each other without using conventional telephones, such as Pulver.com’s Free World Dialup (FWD) and Skype. These services use special numbers to route calls rather than 10-digit phone numbers, and calls are placed from computer to computer.

In a second, unanimous vote, the agency said it would solicit public comment to decide how to regulate telephone calls made via high-speed internet connections, which bypass at least part of the conventional phone network. The vast majority of VoIP services fall into this category.

“When these applications become more complicated, or more traditional, or they touch public-switched networks, they present even more complications,” FCC Chairman Michael Powell said.

Among the issues to be considered is whether such calls should be subject to the same fees as regular telephone service, such as for 911 emergency services or bringing telephone service to poor and rural areas, schools, and libraries. Also to be decided is whether providers of these new services need to pay fees to local telephone companies to complete calls to conventional phones.

The answers to these questions will decide whether VoIP services of this nature are eligible for support by the federal eRate program, which provides discounts on telecommunications services to schools and libraries.

Under current eRate rules, only the equipment needed to provide VoIP service is eligible for support. If the FCC eventually rules that VoIP services delivered via traditional phones are telecommunications services subject to regulation, then these services also would be eligible for eRate discounts.

In addition to high-tech upstarts, conventional phone companies such as Verizon and AT&T are shifting calls away from devices that transmit voices and switching them to computers that convert sounds into data and transmit them along with eMail messages, movies-on-demand, and web pages.

VoIP technology is growing. Time Warner Cable has signed up more than 7,500 customers since it rolled out its telephone service over high-speed internet lines in Portland, Maine, in May. BellSouth Corp. began offering internet phone service in October to its business customers. Verizon also offers some businesses the chance to make internet calls and is preparing to offer similar services to consumers using its broadband DSL connections.

VoIP providers can offer service cheaper than conventional telephone companies. “Voice is just another application that rides on our broadband platform,” said John Billock, chief operating officer of Time Warner Cable.

Arguing against regulation, high-tech company officials say that while a handful of telephone companies have a near-monopoly control over the local networks, and therefore government controls are needed, no companies exercise dominance of internet phone service.

“It’s monopoly that calls out for regulation. We don’t have it here,” said Tom Evslin, chief executive officer of ITXC Corp., a Princeton, N.J.-based company that transmits international calls over the internet.

FCC Commissioner Jonathan Adelstein says it is wrong for internet calls not to be treated the same as conventional phone calls for provision of 911 emergency services, paying into the universal service fund, or helping law enforcement officials track calls.

“Fundamental public interest considerations are at stake,” said Adelstein, who dissented in part with the agency’s FWD decision. “Such ‘hands off’ treatment could mean we are undercutting the safety of consumers, law enforcement and national security, and the integrity of the underlying network and the universal service funding mechanism.”

Separately, the FCC said it would later develop rules concerning law enforcement issues and VoIP service, such as making sure the technology that allows internet calls also allows investigators to tap and trace them.

The commission also voted to develop rules that would allow the power lines that bring electricity to homes and businesses to deliver high-speed internet connections as well. This new technology has the potential to vastly boost the spread of broadband internet access to consumers.

Once a utility or a company it contracts with installs the necessary equipment, a computer user would only have to plug the machine into a special modem that plugs into a conventional electric outlet, according to Jay Birnbaum, vice president of Current Technologies, a company now testing such connections in the Washington, D.C., suburbs.


Federal Communications Commission

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