There’s been a lot of noise recently about the upcoming FCC meeting on VoIP. Many are concerned that the US government will unnecessarily encumber VoIP providers with irrelevant regulations conceived for a different world.
I believe that VoIP should be regulated, but not in the way that you might think.
Firstly, you have to understand that what is really being discussed is not VoIP per se, but rather interconnection with the PSTN. Stand-alone VoIP is for all intents and purposes beyond regulation. It’s too easy to move your client software downloads, proxies and directory servers off-shore, and encrypt traffic from prying eyes. Just ask the folks at Skype. The only alternative is to bring on the full violence of the state and try to outlaw VoIP entirely, as South Africa and Bangladesh have tried to do, with little success.
My position is that the consumer should make up their minds what they want to pay for, as long as there are no externalities or market failures involved. This means that consumers need the facts of what they are being offered clearly presented to them.
The Vonage terms and conditions are a 5800 word opus. Compare this to the dainty 1400 words of a Sprint PCS plan, or humungous 7700 epic from Nextel. Who really reads all this stuff?
The problem with VoIP operators is that the public may be expecting both the product features and regulatory baggage of traditional PSTN, but don’t understand that unregulated VoIP doesn’t guarantee these.
The Vonage Ts&Cs remind you that their system is unpowered (no electric, no calls); doesn’t guarantee 911 service; and outbound number portability is solely at Vonage’s discretion. Would the average consumer looking to slice a few dollars off their phone bill understand the significance of this? Even know that they should be looking out for this? Probably not.
What we need is a disclosure form similar to that for credit cards. The FCC’s job would be to regulate the form of how the offer is presented to the user — not the function, and definitely not the price through the imposition of random fees. Regulate market conversations, not markets.
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99% less fat or 99% fat free? That makes sense, that in order to clarify consumption of the telephony products which interconnect with POTS, the ingredients of the product should be accurately labelled -- not unlike a can of soup.
This can of soup has
50% reliability*
50% 911*
90% quality
99% flexibility
(* requires power)
and is cheaper than the name-brand soup.
Posted by: at November 13, 2003 05:14 PMThis makes sense. Unfortunately, I'm afraid the allure of taxable revenue will lead Congress to rule that VoIP becomes 'telephony' when it touches the PTSN. Regulated competitors will argue that it's just data, but that at some point it becomes voice.
Posted by: at November 14, 2003 07:58 AMSuppose we decide that VoIP is not "telephony" even when it touches the PSTN and the telemarketers use this ruling to ignore Do not call list, I suspect a vast majority of PSTN users will descend on FCC to do something about it.
Commenting on the original article, who will educate the VoIP subscribers that many of the legal protection that is available in PSTN may not be available to them: to wit, which law can be used to handle harassing calls? It is my opinion that the discussion on VoIP regulation has focused on the VoIP/PSTN service providers and government agencies; but little on VoIP/PSTN consumers. To my knowledge, this article is the first one. Kudos.
Aswath
Posted by: at November 14, 2003 09:09 AMIt is indeed a touchy and tricky area. Many companies are VoIP inside and egress to PSTN. So are they regulated too? Or take the example of the company that offers outbound dialing to 800 numbes from SIP. A pure IP SIP provider with no direct connection to the PSTN gives users the ability dial 800 numbers on the PSTN through such a gateway, perhaps in another state. So who gets regulated?
Such gateways are already cheap enough for a small garage shop to connect a few POTS lines. A gray market emerges with such shops springing up and shutting down all the time. This is harder than chasing pirate radio stations for the FCC and state regulators.
Anyway, in the end it perhaps won't matter because none of the SIP/IP systems will have to connect to the old PSTN because nobody will be using it anymore. So all we're really talking about is the transition (half joking).
Posted by: at November 18, 2003 01:35 PMThose garage shops that connect SIP and PSTN are not a problem because they are connecting into PSTN on the line side and existing regulations will be sufficient. The question is really regarding VoIP service providers who need to interconnect to PSTN (for viability) but do not want to be regulated whatsoever. So I do not see how this is akin to pirate radio stations.
Posted by: at November 19, 2003 04:20 PM"Firstly, you have to understand that what is really being discussed is not VoIP per se, but rather interconnection with the PSTN. Stand-alone VoIP is for all intents and purposes beyond regulation"
Currious, what is the cost to a vonage or 8x8 to give their subs access to the ptsn ? And what does nextel have to pay to "get in to the ptsn" network as they are not in bed with a telco as far as i know?
Posted by: at December 3, 2003 11:02 AM