VoIP Has New Guidelines From FCC

WASHINGTON — The Federal Communications Commission (FCC) voted unanimously
Thursday to initiate a rule-making procedure that says Voice over
Internet Protocol (VoIP) technologies should remain largely free of regulatory

But they also noted that Internet telephony companies do have obligations to public
safety and law enforcement agencies.

The FCC commissioners said the vote was designed to “provide a measure of
regulatory stability” to the communications marketplace and to further promote
the development of VoIP services.

In connection with the year-long proceedings, the FCC also announced it will initiate a separate rule-making procedure this spring to address law enforcement concerns that VoIP is not wiretap-friendly. In addition, the FCC’s Internet Policy Working Group will host a March 18 “Solutions Summit” to discuss “creative ways” to focus on 911 location issues associated with VoIP.

“You are going to see the FCC moving simultaneously on a very broad VoIP
front,” Bill Maher of the FCC’s Wireline Competition Bureau said.

In a separate, but related, decision, the FCC ruled, 4-1, that VoIP pioneer
Jeff Pulver’s Free World Dialup (FWD) business does not meet the definition of
a telecommunications service and is free from FCC regulations. Pulver’s VoIP
venture requires members to buy special equipment and have a broadband
connection to talk with each other computer-to-computer. Beyond the equipment,
there are no fees and the free calls are routed entirely over the Internet.

“Like e-mail and instant messaging, FWD builds on consumer acceptance of those
services and operates as a free, peer-to-peer application that connects
consumers around the corner and across the globe,” FCC Chairman Michael Powell
said. “Our ruling formalizes the Commission’s policy of ‘non-regulation’ of
the Internet and, in doing so, preserves the Internet as a free and open
platform for innovation.”

Commissioner Michael J. Copps cast the lone vote against Pulver.

“In this order, we look before we leap. The Commission declares that Free
World Dialup is an information service but does not address any of the
consequences of its decision,” Copps said. “This headlong jump presents
stark challenges for law enforcement and has implications for universal
service, public safety and state and federal relationships that we have yet to
untangle or assess.”

Unlike Pulver’s FWD, most VoIP providers route calls from leased local
telephone lines to a gateway server that converts analog voice into data
packets. From there, the data packets move over the public Internet or a
private backbone to its destination, where it goes through another gateway,
rolling over to a local line. While VoIP is clearly a phone service, providers
say they shouldn’t be regulated in the same manner as publicly-switched
traditional telephone carriers since they don’t traffic in voice packets.

As the major telecoms and cable companies join startup VoIP ventures in moving
voice-converted data traffic over the Internet, the issue becomes critical for
cash-starved states that raise hundreds of millions of dollars in telecom fees
and taxes based on the FCC’s traditional regulatory model for telecoms. Most
of those rules were written decades ago to reflect the government’s interest
on behalf of the public in the monopoly granted to the Bell systems.

In disagreeing with Copps, the other FCC commissioners said public safety and
law enforcement concerns will be dealt with in the larger rule-making

“While IP-enabled services should remain free from traditional monopoly
regulation, rules designed to ensure law enforcement access, universal
service, disability access and emergency 911 service can and should be
preserved in the new architecture,” Powell said. “In today’s [proposed rules],
we seek comment on whether and how to apply discreet regulatory requirements
to fulfill important federal policy objectives.”

Powell added that law enforcement access to VoIP services is “essential.” The
Communications Assistance for Law Enforcement Act (CALEA) requires telephony
services defined as telecommunications carriers under the 1996
Telecommunications Act ensure that their equipment is capable of providing
surveillance capabilities to law enforcement agencies.

“CALEA requirements can and should apply to VoIP and other IP-enabled service
providers, even if these services are ‘information services’ for the purposes
of the Communication Act,” Powell said. “Nothing in today’s proceeding should
be read to suggest that law enforcement agencies should not have the access to
communications infrastructure they need to protect our nation.”

The FCC’s Maher said it will be several weeks before the actual proposed rules
will be published.