High stakes for VoIP regulation debate

When it comes to regulation, there’s usually a lot to be gained—and lost. That’s the scene with the debate over potential new Federal Communications Commission rules for voice-over-IP (VoIP).

Incumbents want less regulation in the all-IP world, and their competition want some rules to ensure that they are not muscled out by losing the ability to interconnect with the new public network that is emerging. Incumbents and some over-the-top VoIP providers want the FCC to continue treating VoIP as an information service, not a Title II voice service. This keeps regulation light.

But rural carriers, led by the NTCA—The Rural Broadband Association, want to ensure that they continue to get reimbursed for carrying VoIP traffic on their networks like they do today when TDM voice calls terminate in their area.

“Taken as a whole, the FCC ruling on VoIP has the potential to reshape the competitive services landscape, and set a future course for the FCC as a regulator of Internet-based services,” wrote commentator Carol Wilson. “One concern for the anti-regulatory folks is that the current FCC, controlled by Democrats, is more likely to try to carve out a regulatory position for the commission going forward than previous commissions. But any attempt to create new powers will immediately be challenged in court, and take some time to be put into effect.”

The trouble with making VoIP a Title II voice service is that it will bring TDM inefficiencies to the IP world. This, at least, is the position of AT&T.

AT&T has said that it has 5,000 different interconnection agreements in the TDM world, and under existing voice rules a competitor can require AT&T to provide interconnection in any LATA, or local access and transport area. This is a designation that doesn't exist in the IP world.

On the other hand, some firms are concerned that, without such regulation of VoIP, there’s the possibility that the big operators such as AT&T and Verizon could freeze them out of markets where they currently have access. They have said they don’t want to recreate the TDM inefficiencies, but no regulation at all is dangerous for the future of VoIP.

These firms want the FCC to require good-faith negotiations over interconnection in the IP world; they say they are not looking for a regulatory clean slate. No matter what happens, many people and businesses are bound to cry foul; there’s too much money involved in this one.

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