Excepts from an Internet Telephony deep dive into whether VOIP will/should be regulated like the US wireless regime...
Full column here.
VoIP Regulation: What Lessons Can We Learn From Wireless?
BY Sara Leibman
At the March 2004 Cellular Telecommunications & Internet Association (CTIA) convention in Atlanta, Voice over Internet Protocol (VoIP) was on everyone’s minds and everyone’s tongues. Federal Communications Commission (FCC) Chairman Michael Powell devoted much of his CTIA 2004 keynote discussion to VoIP as the next “killer app,” which “is [not just] going to be a competitive revolution for the wireline [industry], but for the wireless guys as well.” On regulatory panels throughout the three-day convention, other FCC officials and wireless industry representatives echoed the Chairman’s position, citing VoIP as hottest issue before the Commission in 2004.
Wireless killer app or dud — only time will tell. Some wireless carriers already have introduced IP technology for voice applications into their repertoires in the form of “push-to-talk” services, and others are actively upgrading their wireless networks to third-generation technology via the incorporation of Wi-Fi and WiMAX hotspots. It is still too early, however, to predict whether the promises of handsets that can jump seamlessly between cellular and Wi-Fi networks for the purpose of placing VoIP calls will amount to anything. And, even if technical standards can be developed to address wireless VoIP quality deficiencies, maintaining connections at high rates of speed (e.g., in a moving vehicle), and facilitating call hand-off between hotspots, wireless carriers have yet to make a business case for offering VoIP service.
Regardless of their immediate business plans, wireless carriers are wise to weigh in on the VoIP regulatory front. Federal and state regulators are considering whether, and to what extent, they should impose so-called consumer protection and pro-competition rules on the provision of VoIP, and if wireless carriers decide to participate fully in the VoIP market, they presumably will favor a hands-off approach. Indeed, even if they only become minor VoIP players, wireless carriers will need to ensure that regulatory decisions do not create the opportunity for anticompetitive arbitrage. The current FCC administration appears to have a fondness for new, unlicensed spectrum technologies, and there remains the potential for VoIP policies to undermine the cellular/PCS business model. To the extent VoIP is accorded more favorable regulatory treatment than that enjoyed by the wireless industry today, wireless carriers will have to make every effort to be included under the VoIP regulatory umbrella.
In any event, all VoIP and potential VoIP providers — wired or wireless — should take heed. The FCC is looking seriously at the “wireless model” as an appropriate template for VoIP regulation and, while some VoIP providers have objected to such an approach, others see it as the lesser of numerous evils. At the end of the day, it may be that the wireless regime is the best attainable, but it would behoove VoIP providers to pay close attention now to what the wireless industry really gained and what it lost in the regulatory debate.
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As many VoIP advocates know, it would not further their cause to focus solely on evading legacy telephone regulations and ignore the lessons recently learned by the wireless industry. To give VoIP an opportunity to prove it can really transform the way we communicate, it is essential that government and industry make every effort to avoid the pitfalls and embrace the successes of all regulatory regimes — wireless as well as wireline.
Sara Leibman is a partner in the Communications and Information Technology practice group of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
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