Federal Lawmakers Bid For VoIP Control

Small business owners interested in less government interference and fewer taxes will be glad to hear that state regulatory agencies would have no authority to regulate or tax communication services delivered over the Internet, including Voice over Internet Protocol (VoIP) telephone traffic, under legislation proposed Tuesday in the U.S. House of Representatives.

The authors of the legislation &#151 Representatives Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.) &#151 admitted the legislation stands little chance of passage in Congress this year. Their real intent, they said, is to set the regulatory definitions for a major overhaul of the 1996 Communications Act in the 109th Congress, which will convene in January.

“[We] are seeking to frame the debate over advanced Internet communications regulation, including VoIP regulation, in anticipation of a larger telecommunications overhaul in the Congress beginning in 2005,” Boucher said. “By suggesting basic ground rules today, we are hoping to make a substantial contribution to the rewriting of the [Telecommunications Act].”

The Stearns-Boucher bill, known as the Advanced Internet Communications Service Act of 2004 (AICS), would define all IP-based communications as interstate services subject to the exclusive authority of the Federal Communications Commission (FCC).

The approach marks a major departure from current law with its focus on regulating industry sectors without regard to the services they offer. Under FCC rules, the incumbent Bells are considered “telecommunication providers,” while cable companies are classified as “information services.” Each follows a separate set of rules although both groups are increasingly offering the same services.

A New Approach
Under the proposed legislation, the same regulations would apply to all Internet platforms over which IP-based services are offered.

“Our goal is to treat all advanced IP applications, including VoIP, with a light regulatory touch. Since every Internet user who is equipped for advanced services will have a broad choice of service providers, the services will be highly competitive,” Boucher said. “Accordingly, the regulations which have governed monopoly telephone networks should not apply to new competitive Internet-based technology.”

If eventually adopted as part of an overall telecom reform package, states could face major revenue losses. They currently raise hundreds of millions of dollars by taxing analog telephone services moving over the legacy Bell networks. As the telecoms and cable companies join startup ventures like Vonage in converting that traffic into digital data packages moving over the Internet, states have moved to tax VoIP in the same manner as analog telephone traffic.

The legislation specifically bars both the FCC and states from regulating the rates, charges or terms for any Internet-based voice, data, video or other form of communication that is sent or received over an IP architecture, no matter the provider.

The bill further limits FCC authority over VoIP services to E-911 issues, disability access, universal service funding and access fees when VoIP traffic intersects with the legacy telephone network.

“The same regulations will apply to all Internet platforms over which Internet-based services are offered, whether the platforms be operated by telephone companies, cable companies or other providers,” Boucher said. “The enactment of this provision would place in law the valuable concept that all providers of similar services be treated equally from a regulatory standpoint.”

Stearns called advanced Internet communications services a “killer service. One that can provide all the communication, information and entertainment applications with less effort on the side of the consumer. VoIP is a tremendous, market-changing application, but it is just that &#151 an application.”

He added, “As we move forward in debating changes to the Telecom Act, we should be mindful that we examine the provision of services, not each individual application.”

The Stearns-Boucher bill does not address the issue of wiretap accessibility of IP-based networks. Stearns said the issue would be addressed in a separate bill.

Adapted from Internetnews.com.