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FCC Forum Divided on Future VoIP Regulation 232

Posted by michael from the not-a-question-of-if dept.
ElCheapo writes "As the great philosopher Eminem once said, 'The FCC won't let [VoIP] be, or let [VoIP] be free.' In Washington today, the FCC held a public forum 'to gather information concerning advancements, innovations, and regulatory issues related to VoIP services.' Slashdot has seen numerous stories on VoIP regulation recently, but Tom Evslin, CEO of ITXC, brought up another point: If VoIP is over-regulated, it will not go away, it will just move to other countries and reach the point where regulation can no longer be enforced. With or without VoIP regulation, will a global P2P (PSTN-connected) voice network emerge? Will it start out as hobbyists setting up Asterisk Open Source PBX boxes connected to their home POTS line? Will some form of ENUM allow least cost routing to boxes sitting in basements and garages around the world? If an ITSP in Europe can setup an Asterisk box with PSTN access and start offering US phone numbers and vice-versa, will global number plans become obsolete? What effect will the ridiculously low barrier to entry for VoIP have on telecommunications?"
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FCC Forum Divided on Future VoIP Regulation More

FCC Forum Divided on Future VoIP Regulation

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  • How quaint. (Score:4, Insightful)

    by Anonymous Coward on Tuesday December 02, 2003 @03:46PM (#7611251)
    The FCC has already made up it's mind: it will hand over the business to the telco conglomerates. The little man has no say in this, these "public meetings" are all a charade.

    • Re:How quaint. (Score:2, Insightful)

      by iamplupp ( 728943 )
      cited from opening remarks by FCC chairman M K Powell: "no regulator, either federal or state, should thread into this area without an absolutely compelling justification for doing so"

    • Re:How quaint. (Score:2, Insightful)

      by NewWaveNet ( 584716 )
      The FCC has already made up it's mind: it will hand over the business to the telco conglomerates.
      I think you're missing the point. Who cares if the FCC decides to regulate things when the companies offering these services are beyond their jurisdiction.

    • Re:How quaint. (Score:5, Interesting)

      by swordboy ( 472941 ) on Tuesday December 02, 2003 @04:07PM (#7611446) Journal
      The little man has no say in this, these "public meetings" are all a charade.

      In this case, I would have to disagree.

      Any Joe Schmoe with the proper resources (either intellectual or financial) can whip up a VoIP application and communicate over the internet merely free of regulators. This won't change.

      Now, all these telecom taxes exist because the PSTN (public switched telephone network) is a monopoly - you can't have multiple PSTN networks. It would become too bulky and there would be no economy of scale. The taxes exist so that this monopoly can be regulated.

      Now, I can see a tax when a VoIP device interfaces with the PSTN. But this should only pressure the VoIP industry to move away from the PSTN. PSTN, as stated above, is bulky and not practical when we have efficient packet-switching networks that can easily replace it at 60 percent of the cost.

      I vote for taxes on a per-PSTN call basis. This would be a good compromise - those that use packet-switching would not have to support the junk that is PSTN.

      I would also like a module to interface with my home phone system. If I dial a "normal" PSTN phone number, it simply routes my call over my POTS phone line. If I dial a # or * prior to an IP address or URL, then it should route my call over my internet connection.

      After a while, I wouldn't see the need for a PSTN, anymore.

      • Re:How quaint. (Score:3, Insightful)

        by Greger47 ( 516305 )

        > After a while, I wouldn't see the need for a PSTN, anymore.

        Yes, but you still need cables to each home transporting that internet traffic.

        And it's the cables that are the natural monopoly, not the fact that they used to be used for phonecalls.

        So while PSTN might be dying, sooner or later broadband internet connections will end up regulated for the same reasons as PSTN was.

        /greger

      • Now, all these telecom taxes exist because the PSTN (public switched telephone network) is a monopoly - you can't have multiple PSTN networks.

        How so? We do have multiple PSTN networks. Both for long distance, and for local (only one land-line based local, usually, but many mobile based lines). Are you saying that it's all part of one system? Isn't the internet the same?

        PSTN, as stated above, is bulky and not practical when we have efficient packet-switching networks that can easily replace it at 60

    • I wonder why wireless operations were spun off from ATT and why Sprint has a tracking stock for the wireless side of the biz. Maybe as a safety net if VoIP is not put under control of the telco conglomerates either via FCC opposing such a move or through a technical inability to control such software. It is not a sure thing that the telco conglomerates will control VoIP.
    • The problem is that telecom taxes are a revenue source. This problem will persist while we have a tax structure that imposes taxes at multiple points: sales tax, income tax, property tax in addition to overhead taxes like universal access tax, gas tax, etc. Politicians like to hide the amount of money they are taxing you by sliding taxes onto as many activities as possible.

      Your phone bill includes, among other taxes and fees, a universal access change. This money goes towards funding internet access for sc

  • Curious (Score:4, Interesting)

    by ActionPlant ( 721843 ) on Tuesday December 02, 2003 @03:50PM (#7611285) Homepage
    No idea, really...stating that if the US over-regulates the tech will move overseas is obvious.

    What I'm wondering is how far overseas they'll have to move. What are our Canadian neighbors doing?

    Damon,
    • As a Canadian, I am fully willing to set up a VOIP box in my basement at a very minimal cost to the overtaxed Americans. I am sure that it will run for at least a month before our overbearing and tax hungry government will start to tax the hell out of me too.
      • I'm two hours from the border myself, which is why I was curious.

        Perhaps if you were to disguise what you do as...um...non-profit?

        Which brings up an interesting question. What if a non-profit organization were to provide services like this to "members", perhaps like a co-op?

        Damon,
        • I guess if you had a specific set of people that called each other - Uncle Bob in Texas calls Aunt Jane in Istanbul everyday. The problem I see is that you can't usually predict who you will call at any specific time. In business you do not want to set up a whole system to call a customer - you just want to pick up the phone and call him, figure out the cost after the fact. The underlying problem I see is that you have to get everyone to move to VOIP at the same time. Not impossible, but certainly out of my

    • Re:Curious (Score:3, Informative)

      by doconnor ( 134648 )

      The Canadian equivalent of the FCC, the CRTC, decided [crtc.gc.ca] years ago not to regulate the Internet.

    • Overseas doesn't even have to be a country... a second hand oil rig with a satellite connection is all it takes, as long as it's in international waters it isn't bound to any nation's regulation. IIRC several web hosts are set up like this.

      Of course they could have special import/export duties on VoIP services... anti free trade taxes seem to be the government's favorite at the moment (at least the steel tarriff is on the way out... cheaper machines for all!).

    • Re:Curious (Score:3, Interesting)

      by Dr Caleb ( 121505 )
      The second largest phone company Telus [telus.com] is switching most of it's existing POTS [telephonyonline.com] network to VoIP [crtc.gc.ca].

    • What can they do about this? It seems to me that they would be nicely positioned to take over telecommunications for huge chunks of the U.S. population.

      Obvious problems might include language issues, and a funky regulatory climate, but that isn't any big deal.

      I'd really like to know, if screw it up here in the U.S. what will Mexico do?
  • So given Debian, Asterix and a modem it's possible for me to set up my own (personal) VoIP line? er... I'm sure I'm missing something. Someone boil all this telco talk down for me ;)

    • Re:Asterix - VoIP for me? (Score:4, Informative)

      by RustyTaco ( 301580 ) on Tuesday December 02, 2003 @05:12PM (#7612054) Homepage
      Debian, check, Asterisk, check, modem, no. Digum single line FXS card, yes. And if you throw a single line FXO card in too you can plug your phone into the FXS, PTSN line into the FXO, and configure asterisk to route what it can (friends, etc) over some sort of VoIP(H323, SIP, IAX, etc) and everything else out the PTSN line.

      As an uber bonus you get voicemail and can then to spiffy menus and skrew with people just like call centers like to you, complete with MP3 hold music. "I value your call, please hold." "I'm not answering right now, press one to leave a message, press 2 to page my cell phone with your caller ID info..." etc. Hell, you can even use CallerID to decide how to answer calls. Work=>strait to voicemail, girlfriend (Hey! It could happen) => play a special message and ring the phone with a distinctive ring. Ex-girlfriend=>"This number has been disconnected, or is not in service".

      It's almost enough to make me want a land line ;)

      - RustyTaco

  • Is this an essay test? (Score:5, Funny)

    by plexxer ( 214589 ) on Tuesday December 02, 2003 @03:52PM (#7611297)
    With or without VoIP regulation, will a global P2P (PSTN-connected) voice network emerge? Will it start out as hobbyists setting up Asterisk Open Source PBX boxes connected to their home POTS line? Will some form of ENUM allow least cost routing to boxes sitting in basements and garages around the world? If an ITSP in Europe can setup an Asterisk box with PSTN access and start offering US phone numbers and vice-versa, will global number plans become obsolete? What effect will the ridiculously low barrier to entry for VoIP have on telecommunications?

    Answer each question completely, citing examples whenever possible. Use the back of Slashdot for scratchwork if necessary.
    • 1. With or without VoIP regulation, will a global P2P (PSTN-connected) voice network emerge?

      C. Nothing can stop the network. Communications want to be free. Pirated voice communications will just go underground. They can't sue everybody. Besides, they deserve it, the convicted monopolists.

      Will it start out as hobbyists setting up Asterisk Open Source PBX boxes connected to their home POTS line?

      B. I already have an OS PBX box connected to my POTS line through a POS P2.

      Will some form of ENUM allo

  • What will emerge (Score:5, Insightful)

    by mindstrm ( 20013 ) on Tuesday December 02, 2003 @03:52PM (#7611301)
    is a global voip network, and pots will become largely irrelevant in connected areas.

    The need for pots to internet gateways is what holds us up now.. think of how things owrk once most people are all using voip.. suddenly, it's all software.. adn hooking people together for voice stuff no longer needs ANY kind of centralizing....

    it won't be regulated, as ultimately, it can't be.

    • VoIP is an itch that some people need to scratch and therefore it will happen (well, it *is* happening). To me the question that remains is whether the teleglomerates are onboard or not. Saith the people: You are either with us, or against us -- otherwise you'll just have to lobby the regulations so deeply so as to hinder voip usage/access.
    • I think you will find that any call that terminates in the USA is subject to the FCC's control. Therefore any of those global voip calls terminating in USA is likely to be of interest to them. Maybe before long answering an unlicensed (unauthorised) VoIP call could be a felony.

      What you can guarantee is that given the money involved and the telcos' lobbying/bribery powers they won't just roll over and die.

      Remember kids, be nice to AT&T, they invented Unix (then sold/gave) it to SCO.

    • Actually, what I expect to see emerge is a bi-directional streaming audio protocol. Whether it has anything to do with the telephone or not is a matter of whether there is too much regulation there. For that matter, it may well not be limited to a single audio channel, but have support for video (if you have enough bandwidth), general file transfer, shared drawing space, etc.

      On the other hand, the same people may well still use traditional telephony to call traditional phone numbers, because it could be to

    • suddenly, it's all software.. adn hooking people together for voice stuff no longer needs ANY kind of centralizing....

      The centralizing is in the network itself. You're not going to run a phone line from your house to every single other house in the world. That would be silly. Instead you'll run a whole town full of houses to a CO, and then run a bunch of towns into a common area for a metropolitan area. For local calls perhaps you could use direct wireless connections, but this is the exception, not

  • It has already started (Score:3, Insightful)

    by srboneidle ( 648298 ) on Tuesday December 02, 2003 @03:52PM (#7611302)
    I don't really understand how any regulation on VOIP would work. Living in England, I speak to my family in Spain on a daily basis using VOIP. At the moment I sit down if front of a computer and use microphone/speakers. How long will it be until someone comes up with a telephone type device which you plug into your DSL modem?
    • i believe Cisco already has a VoIP phone for businesses. one office i worked in we had something like one of these. your phone acted like a normal phone. VoIP for internal. and converted to normal tele when you dialed an outside #.
    • Kinda like this [vonage-credit.com] ?

      I think the next "killer app" will be a linux box that does this AND has the ability to sync up your entire house's phone system. Right now, with Vonage, I do not believe there is a way to do it...you can only have the phone coming out of the router. It would be really nifty if someone could hook up a router box with a "Modem"-like card that just plugs into your box and a phone jack. That phone jack would then feed the rest of the house.
    • There are devices like this now, Vonage http://www.vonage.com, comes to mind, though the early VOIP providers are going through a price war/shakeout so it's hard to see who will come out on top (or with the standard).
      There is a basic assumption in the original post, local calls are not free here in the Netherlands. You pay for every minute on the phone, it's just a question of how much. And individual connection points doesn't scale well. VOIP and traditional telcos will merge only with the agreement and
      • What I really meant is why use the current telephone system at all? As flat rate high speed internet connections become more and more common it becomes that much easier to stick to pure VOIP. All you have to do is make it as easy as dialing a phone and people will use it. I haven't paid for a phone call to my family for a long time now.

        PS: I highly recommend TeamSpeak (www.teamspeak.org) which is what I use at the moment.

  • The big question for me (Score:3, Insightful)

    by Anonymous Coward on Tuesday December 02, 2003 @03:52PM (#7611307)
    How long until we start seeing the P2P-based net phone networks able to connect to POTS?

    All it would take is one 10-10-whatever-like pay service where you call a node on the P2P network, then enter a real-life phone number, which they connect you to..
    • As mentioned before, broadband providers in Japan have already made this a reality.

      I have Yahoo! BB service, and their setup is really sweet. It automatically detects if I'm calling another Yahoo customer, and the call is free. Calls back to the states are only 2 cents a minute just by dialing a three-number prefix before I dial the normal country code and number.

  • Just The Facts (Score:5, Informative)

    by Pave Low ( 566880 ) on Tuesday December 02, 2003 @03:53PM (#7611321) Journal
    For those who want to know what the issue is about, instead of scanning the submitter's poor writeup filled with his slant and myriad questions, here's a better article on what's going on.

    FCC Chairman Powell Opposes Internet Phone Regulation. [washingtonpost.com]

  • Why should IP make telephone calls free? (Score:4, Insightful)

    by EmbeddedJanitor ( 597831 ) on Tuesday December 02, 2003 @03:55PM (#7611338)
    I've said this before... when phone moved from copper to fibre, the regulations didn't change so why expect them to change when the underlying medium is IP? I'm not saying the regulation is a GoodThing, but surely any arguments that say that a change to IP as a medium is just plain illogical.

    Sure, this could drive some VoIp offshore, but what they're likely controlling is the call itself. If the call originates or terminates in the USofA, then the call falls under FCC control and they will want their slice.

    • The real question you should ask is why are phone calls so expensive in the first place? Originally, the regulation was in place to make sure the rural areas had access to the telecommunications, so regulation still may make some sense in that regard.

      But what makes a phone call different from an email, or from an instant message chat with someone around the world? The only difference is speed. So should the FCC put caps on speed to make sure VOIP is not allowed? Buy a cable modem and pay a monthly SPEE

    • Re:Why should IP make telephone calls free? (Score:5, Insightful)

      by interiot ( 50685 ) on Tuesday December 02, 2003 @04:13PM (#7611481) Homepage
      why expect them to change when the underlying medium is IP?

      Okay, charge for the medium in general then (IP, cable, DSL, etc...), not particular applications running on top of it (irc, email, voip). Applications are far too fluid, innovative, and morphable/hidable (especialy for geeks like us) for the government to define exactly what should be charged for and what shouldn't. (though you could say that about radio waves too, *grumble*). I don't want an intrusive infrastructure hard-wired into my computer or on the ISP's side that analyzes every packet and charges differently for each one.

    • Re:Why should IP make telephone calls free? (Score:5, Insightful)

      by ad0gg ( 594412 ) on Tuesday December 02, 2003 @04:30PM (#7611602)
      VOIP is that just that Voice over IP, be it Sip or H323 or any thing else. So now I should pay money because I play Counterstrike and use voice enabled feature to talk to my teammates? Or Xbox live users? Or using video conferencing over IM? Or any of the web conferencing products? Better yet, why should I be double taxed. I already pay taxes on my telephone line, now you want me to be double taxed because I'm using VOIP too? VOIP is only part of the future, SIP which can specify many different types of communication will be the future. People keep thinking our phones are going to be used for voice only, take a look at cell phones. Its going to be text messages(sms), video conferencing, picture messageing(mms) and much more. I guess we could kill it now by over regulating it since change is bad.
      • We didn't complain when the government tacked on a universal service fee to our phone bills because it was "for the poor".

        We didn't complain when the government tacked on a public access fee to our phone bills to pay for internet access in schools and libraries because it was "for the children".

        Now we are getting bit in the ass by those same taxes and the loss of revenue that would ensue from moving to an unregulated system.

        The right solution would be to insist that the government stop taxing every econo
      • The way I like to see it happen is for techs to just take a step around the regulatory bodies, the industry, anyone who thinks they are in a position of authority and just implement the technology, create their own standard and make it work well, for free, using highly competitive technology.

        The phone and the TV will both become software on the computer, just like the radio and stereo.

        Sure we could keep it all separate and have a separate phone, cable and internet bill. But if you're going to buy a compu
    • when phone moved from copper to fibre, the regulations didn't change so why expect them to change when the underlying medium is IP?

      because i can afford for 30 bucks a month an adsl line that gives me IP to do voice over it, but i didnt have the same chance with fiber.

      Massification is a function of price. This has to change the regulations or you face a monopoly like i do in my country, one that will be made innefective because they wont be able to stop the voip revolution even if they want to. It will ju
    • This shouldn't be regulated for the same reason that data connections (read: your 57.6 kbps modem) over POTS lines are not - because the line is already paid for. The transmission medium can be FO, Cu, or even PVC pipe (if you can get that to carry a signal), but one way or another, the plumbing as it were is covered. Just because you change the content of the signal doesn't mean that the pipes are radically altered. TCP/IP is just part of that hash of stuff that travels over the wire.

      To charge just to

    • The telephony network gives you reliable, timely delivery. That is, you get a chunk of bandwidth on all of the segments between you and the other end, and this bandwidth carries your signal, whatever it is, as long as you're connected. This is why, if the system is overloaded, you may have a hard time getting a connection, but once you've got one, it's just like when the system isn't overloaded.

      This is fundamentally different from an IP network, where routers along the path delay or drop packets as needed
    • There are numerous responses to what I said here. It sounds to me like there's a bigger question:

      Has the FCC outlived its role?

      If you go trawl the www you'll probably find that the FCC was set up to ensure that telecommunications got rolled out effectively across the USA. I doubt the original intention was to control telecoms for the benefit of the telcos.

      Maybe, in this age of more-or-less global and ubiquitous telecoms, the FCC has completed its role and is no longer relevant.

  • I'll be interested to see what comes of this. If the FCC does successfully implement regulation (read: taxation) on VoIP services, it seems like this could be the first step of further future regulation of Internet services.

    With global networking technology, I think we'll be seeing a big change in telecommunication service in the coming years.

  • Already paid for (Score:5, Insightful)

    by BWJones ( 18351 ) on Tuesday December 02, 2003 @03:55PM (#7611342) Homepage Journal
    What this comes down to is companies suddenly realizing they are set to lose market share. We are rather successfully using iChat AV to remotely collaborate from N. America to New Zealand, but here is the deal. We are already paying for access to the Internet out of our grant indirect costs to the university. So are others that are paying to have access to the Internet from their homes and businesses. If the major phone companies have not been on the ball enough to see this one coming, perhaps they need new boards of directors or CEO's as voice over IP has not been an overnight phenomenon. Furthermore, the government should not be stepping in to attempt to rescue companies that have not been smart enough to adequately compete. Right? Is this what market consolidation and deregulation done for us?

    • Furthermore, the government should not be stepping in to attempt to rescue companies that have not been smart enough to adequately compete.
      Unless it compromises national infrastructure, things such as railroads, highways, energy generation... and telecom.
      • Well, if you really want to deter this kind of behavior, you should't be offering them a bailout (which is nothing more than a reward for screwing everybody over.) You should, instead, threaten them with nationalization - that will really light a fire under their asses. Otherwise, there's every incentive to cut muscle along with fat, in the name of profits during lean times, because you know that the government will step in with cheap loans, debt forgiveness, tax incentives, etc. if you run into trouble.

  • Moeny money money (Score:1, Insightful)

    by Anonymous Coward
    The only thing holding VOIP back is the FCC deciding who gets money from it. I mean, the only reason the US isn't using solar power exclusively is because nobody's found out how to run a sunbeam through a meter, right?

    The telcos are scared that this will make them obsolete, so they HAVE to find a way to make a buck off this.

  • Let the market rule (Score:4, Insightful)

    by mikeymckay ( 138669 ) on Tuesday December 02, 2003 @04:00PM (#7611382) Homepage Journal
    Allow VOIP to be unregulated (you can't really stop this anyway). If it causes the phone companies to start losing money then they raise prices to compensate, and our home phone lines cost more.

    I don't know where most of the revenue stream for telcos comes from, but if it is from long distance phone calls - then they need a new business plan. Those days are over. If they are spending too much money to keep the internet working then they need to raise prices on access to the internet lines and the price will rise at our ISPs.

    I think the real problem is the stupid white men are seeing their business replaced by better technology and they are crying to Sugar Daddy Bush to help them out. New technology almost always means business die.

    RIP phone companies.
    • The point is not the revenue for the companies, it's revenue for the government. It simply isn't fair that the telephone companies are regulated, and so pay (albeit minimal) tax while the VOIP companies are not. Both providers should be heaviliy taxed, regardless of the money in hand for the corporations and their shareholders.
  • Tax something else like air or water.

    But not speech. It's protected.

  • A bit is a bit is a bit (Score:3, Interesting)

    by evilned ( 146392 ) on Tuesday December 02, 2003 @04:05PM (#7611418) Homepage
    When will the FCC wake up and realize this simple idea. A bit flowing around the internet is the same thing whether it is part of a webpage, streaming video, or VoIP. Wanna clean stuff up? Clear out all the rules and make the regulations standard regardless of the type of data being delivered.

  • Regulators irrelevant (Score:5, Insightful)

    by nv5 ( 697631 ) on Tuesday December 02, 2003 @04:06PM (#7611432) Homepage Journal
    Once you have any data stream over IP, it is pretty difficult to regulate, since it can be disguised on varying port numbers, encryption (which is probably a good idea anyway) and other techniques. Regulation tends to work on the big conglomerates, since they operate so much in public. A homespun underground cottage industry movement is very difficult to control (see P2P). Therefore I find the discussions about regulating VoIP rather irrelevant.
    • The other interesting effect of this is that wiretapping will become obsolete since encryption of phone calls will be trivial to implement in software.

      Listen closely...you can hear the FBI, CIA, etc., shaking in their boots over this possibility. I can't imagine that they'll just let it happen without a fight.

      M
    • Once you have any data stream over IP, it is pretty difficult to regulate, since it can be disguised on varying port numbers, encryption (which is probably a good idea anyway) and other techniques.

      Unfortunately, to be a network you need to conform to a standard - in order to connect to all the OTHER users of the network. This exposes you to the regulators.

      The techniques you describe would work fine for a small, closed community such as a criminal gang, terrorist cell, recreational club, or other small a


  • Look, at the end of the day it's all the same anyway.. If you've got something they want, you can tell them what to do.

    So don't be surprised they're making you and I fall in line. If you were smart, you'd be doing exactly the same.

  • POTS/PSTN Defined (Score:5, Informative)

    by romper ( 47937 ) on Tuesday December 02, 2003 @04:13PM (#7611487)
    For non-telco-speaking Slashdotters..

    POTS = Plain Old Telephone System
    PSTN = Public Switched Telephone Network
  • All this talk about bridging VoIP with the phone system. I dan't care about the problems with that, I don't want to do it, I have no interest in it, and if somehow telemarketers start hitting me up on VoIP over it, I'm gunna go Bun Bun on them [sluggy.com].
  • Soon they will realise that voip is just another part of the internet and that they should have been regulating the whole internet all this time, then they will realise that actually the internet is just another form of human communication and thus speech and writing should be regulated. I propose a pen ownership license, and law enforcement needs to be aware that people might try and use their own blood as ink for lack of a pen. Also we need to divide up the audible sound spectrum and sell it off to the hi
  • We've gone from a nation of individualists to a nation of selfish individuals, all crying "Me! Me! Me!" to a government composed primarily of short-sighted, ignorant persons concerned only with placating the short-sighted, ignorant masses.

    Our government has, therefore, become adept at siphoning money from us all in a manner that is least likely to attract negative attention (think payroll taxes). We all know the real purpose of VoIP "regulation" is to protect an outdated telecom business model and the tax
  • They're hesitating between:
    1. Providing a cheaper service to the users.
    2. Make higher profits to screw consumers more.
    I'm betting on #2 tactical donations.

  • Voip! Voip! (Score:5, Interesting)

    by madro ( 221107 ) * on Tuesday December 02, 2003 @04:23PM (#7611553)
    [excerpted from today's Wall Street Journal, which has even more access restrictions than the New York Times. Paul Kedrosky, the author of the commentary, teaches business at the University of California, San Diego.]

    Incumbent telecoms are tying themselves in knots over all this. They generally think that the current wave of upstart VOIP providers are getting a free ride given that they currently don't pay the same regulator-decreed access fees and subsidies. But incumbents are also smart enough to implicitly threaten to cut and run to VOIP themselves if the FCC gives competitors free rein in profitable voice markets.

    But providers of VOIP service are only slightly less cynical. While they are getting scads of fawning press now, it is hard to imagine a future that includes most of them. Because six years or so from now we will almost certainly be calling from dedicated voice devices that plug directly into your high-speed Internet connection. You are no more likely to be billed for future phone calls than you are for current e-mails.

    Call it the Napsterization of the phone business, where paying VOIP companies $35 a month for the privilege of connecting you via the Internet with the spendthrift sorts on the old telecommunications network will seem silly and unnecessary. The smartest thing most VOIP vendors could do now is quickly exploit VOIP-phoria to go public or get bought. Wait, that's what they are doing.

    There is work left for regulators, like ironing out 911 and 411 access, as well as how law enforcement will tap Internet phone calls. But 911 issues didn't stop cell phones, and the arrival of e-mail that police could no longer steam open rightly didn't cause e-mail to be outlawed.

  • VOIP won't drastically affect POTS (Score:4, Interesting)

    by dacarr ( 562277 ) on Tuesday December 02, 2003 @04:25PM (#7611568) Homepage Journal
    Yes, I've said it, and here's my reasoning.

    Consider what you need to do in order to get an analogue voice line: you call the phone company, answer a few questions, wait a short period of time (usually a few hours), and plug in the phone. Bang, you have a phone number and can call your mom. Ludicrously simple, and you don't need a child of five to do this.

    (Yes, that's right, the old WC Fields axiom has been reversed - the more complex stuff amongst people who can't figure it out are best left to five year old children.)

    Now what do you need for a VoIP line? A broadband TCP/IP connection. On a DSL this is redundant, so the cable companies are left with that option - and unless you are just wanting to blow money (or you really need reliability or uber speed), you probably don't have a T1 or better in the home. More or less simple (a quick rewire of your cabling), turn it on, bang, you have a phone and, again, can call mom.

    But wait a moment. What of the twelve-o'clock flashers? You know, the people whose VCRs and similar persistently flash 12:00 because they don't know how to set them, or the people who need the tech support guy to tell them how to turn the computer on. These are people who don't understand the concept of RTFM, so they can't be bothered with how to pull a plug out of one hole and put it in another hole for fear of doing irreversable damage. Yes, you need a child for these people, but these people trust their own children even less with technology. Dead end.

    The point of this is that, unless the telephone companies make radical changes in their hardware, VoIP will probably only have a small niche market amongst people who can figure out how to wire their own stereo, which (and this is strictly theory) seems to be the vast minority on the 'net - and then again, many of these people are probably not even *on* the 'net to begin with, thus excluding them from VoIP entirely. But they'll probably ask anyway.
    • Except that I have this really cool USB device.

      It plugs into your USB port, you insert the CD, plug in a handset (complete with dial) into the device, and away you go.

      Like digital cameras have become....

      (Hey, if this is new, then I claim patent rights....)
    • Consider what you need to do in order to get an analogue voice line: you call the phone company, answer a few questions, wait a short period of time (usually a few hours), and plug in the phone. Bang, you have a phone number and can call your mom. Ludicrously simple, and you don't need a child of five to do this.

      I recently had to do this (Verizon in NYC). It went more like...

      Call the phone company. Get list of required documentation. Fax copies of documentation to phone company. Wait until next day. Cal

    • Re:VOIP won't drastically affect POTS (Score:2, Interesting)

      by Anonymous Coward
      I disagree. VoIP has already affected POTS in that many carriers are using IP protocol and sofswitches to carry traffic over the fiber backbone. Also, most international calls that are not bound for Europe are transmitted via IP.

      I also do not buy your argument that radical changes would need to be made to the telco's hardware in order for p2p voip to be practical. Cisco and Nortel both ofer voip routers that plug into your cable modem. Then you simply plug your phone into the router. All that a comp

    • I Disagree (Score:4, Interesting)

      by Angram ( 517383 ) on Tuesday December 02, 2003 @05:46PM (#7612423)
      I disagree. A few years ago, I would have agreed with you, but the 12:00ers have proven that if they see enough benefit they can learn just enough to get what they want. P2P networks, CD burning, cell phones, and email are just a few examples of what people who have no technological ability can do today. I know many people who cannot find the power button on any computer but their own and have no hope of setting a VCR clock, yet can burn CDs full of MP3s they've found on Kazaa, etc.

  • Consider how regulation is good (Score:4, Insightful)

    by RebornData ( 25811 ) on Tuesday December 02, 2003 @05:02PM (#7611953)
    I listened to some of the FCC discussion on CSPAN, and with all the mindless "let VOIP be free" perspectives being spouted here, let me raise a few of the more valid concerns I heard with letting VOIP go completely unregulated (and forecasting a dramatic drop in POTS usage as broadband spreads and people use it for phone):

    1. Emergency use:
    VOIP will not have the level of reliability of POTS, especially during natural disasters and other emergencies. In theory an IP network can be made just as reliable, but the simple issue of powering the phones is a big issue... the phone system generally has been significantly more reliable than the power system. With a VOIP phone, you're dead if you lose power. Traditional phones keep going.

    This may seem like a small issue, but an example cited during the hearing was a major weather-related power outage in California, where the utility determined after the fact that customers were less annoyed by the fact that the power was off than the fact that the phone system at the power company was not equipped to give them good repair status information. People count on the phone system, and it needs to be there, especially for 911 emergency use.

    2. Funding and effectiveness of 911
    The 911 system is funded by POTS and cellular surcharges. Even a 25% drop in POTS usage due to VOIP would be disasterous from a funding perspective. And remember that when you call 911 from a landline (and in more and more areas, cellular), they know where you are. VOIP is extremely far away from having any sort of location capability.

    3. Funding of Universal Access
    Everyone in the country has access to phone service, no matter how rural / remote they are. This has been a tremendously important program, but would have funding problems similar to 911 if a big chunk of POTS goes away.

    Anyway, my point is that despite how "retro" POTS is technically, it has significant merits that VOIP currently does not provide. I'm not suggesting that any of the problems described above are unsolveable for VOIP, but I think it's awfully unlikely that "market forces" will magically provide the answers. There needs to be some regulation in order that the good in POTS is preserved going forward.

    • Emergency use

      This is an argument against VoIP, not an argument against regulating VoIP. We don't force people to have telephones, after all, so regulation is irrelevant.

      Personally, I have no need for a land line, but it has nothing to do with VoIP. In an emergency, I can just use my cell phone. I do have a land line, but that's because my ADSL service requires that I have one. The only place I've ever given my land-line number to is my bank, who wouldn't accept my cell phone number as it was located i

  • Regulation != Bad (Score:4, Insightful)

    by i_r_sensitive ( 697893 ) on Tuesday December 02, 2003 @05:10PM (#7612031)
    Folks keep hammering on the evils of regulation, this is an absolute fallacy and needs to squashed now.

    First of all, what about the regulations which mandated performance expectatiuons. Phone service has traditionally been viewed as an essential service, some of these regulations stipulate uptimes for phone networks, etc. etc. The net effect of these has been that the consumer expects the phone to work, reliably, every time. VoIP providers (other than the big telecomms players) by and large will not be able to meet this expectation, or rather will be at the mercy of infrastructure they don't control, and organizations they have no binding agreements with.

    Some of these regulations have also made it unlawful for private individuals to tap each others phones. (This being a right reserved to the government, who supposes they own the electrons involved anyways...) Without the private networks owned by the telcos, and the regulatory controls placed on those networks, wiretapping becomes a skill that the current generation of script kiddies can master in three hours. It's all data folks, it can be diverted, copied, folded, mutilated, spindled just like form data. Sure it can be encrypted, but there is some fairly significant overhead involved, without crypto hardware, I think you would notice degraded conversation quality.

    Besides, do we really want to offer the marketing organizations a way to converge SPAM and telemarketing?

  • I am surprised that no-one has yet noted that opportunistic encryption is a very simple "solution" to this issue, along with a host of other related problems.

    Many people, myself included, object to "smart network" architectures. I dislike networks in which intermediate devices such as routers and switches provide a host of value added services like Quality of Service, tracking Napster users, or taxing VoIP traffic. I prefer network designs in which "smart" end nodes are linked together by "Big Dumb Pipes

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