Report: Internet Phone Calls Bright Future for Consumers, Industry Will Need Regulatory Certainty

The report finds that an unsettled regulatory picture could threaten emerging VoIP services with unresolved questions about whether and how to regulate VoIP services, as well as other critical issues surrounding this fast-growing technology. VoIP is widely seen as having the potential to transform the telecom industry and bring tremendous benefits to the entire economy. The new NMRC report released today entitled, The Future of Internet Phone Call Technology: Regulatory Imperatives to Protect the Promise of VoIP for Industry and Consumers, outlines the views of six leading academic and industry experts about the challenges that face would-be regulators of VoIP services. The Federal Communications Commission (FCC) recently began to examine, at a public hearing held December 1, 2003, the critical issues surrounding new VoIP services in order to provide clear regulatory direction. Major carriers and cable providers have also announced their intention to provide this new technology. Given that this issue is squarely before the FCC, the authors of the NMRC report call on the FCC to (1) develop a clear national VoIP framework; (2) subject VoIP applications that function like telecom services to certain telephony rules; (3) regulate all VoIP service providers equally; and (4) ensure that statutory social responsibilities are met. The NMRC report concludes: The authors find that to ensure VoIPs continued growth, VoIP service providers, regardless of the technology used, should adhere to certain rules of the telecommunications landscape, especially those that advance important public policy objectives such as universal access, access for law enforcement, and emergency services. At the same time, most of the authors find that VoIP providers should be exempted from the full weight of state and federal regulation. Full compliance with every federal, state, and local telecom regulation would most likely slow VoIPs entry into the consumer market. The report notes that VoIP occupies a middle ground between traditional telephone service and newer data services to which some, but not all, practices and regulations should apply to expand the promise of VoIP without undermining the building blocks of the telecom industry. VoIP is a technology whose great promise should be realized without resorting to cumbersome regulation. The NMRC report authors include Debbie Goldman, research economist for the Communications Workers of America; David P. McClure, president and chief executive officer of the U.S. Internet Industry Association; Lee McKnight, associate professor at Syracuse University and M.I.T. research affiliate, and Martha Garcia-Murillo, assistant professor, School of Information Studies, Syracuse University; Gregg C. Vanderheiden, professor of industrial engineering, University of Wisconsin-Madison; and Glenn Woroch, adjunct professor of economics, University of California-Berkeley, and executive director, Center for Research on Telecommunications Policy.