Subject: [NEXTEL-1] Senate, FCC Put VoIP's Future On The Front Burner

From: [email-masked]
Date: Mon, 10 Nov 2003 22:50:11 -0500

Senate, FCC Put VoIP's Future On The Front Burner

Nov 11, 2003

At presstime, the U.S. Senate was in the process of debating codifying
the current
moratorium on taxing e-commerce and Internet access, including voice
over
Internet Protocol (VoIP) services. In a Nov. 5 letter, Sen. Ron Wyden
(D-Ore.), a
longtime advocate of - read his lips - no Internet taxes, urged FCC
Chairman
Michael Powell to submit his agency's plans for any future regulation of
VoIP as
part of the discussion.

Now that investors are being urged to sink their money into such
startups as
Vonage and Skype, coupled with decisions from the federal courts and
this
congressional debate, VoIP is becoming more than just the next big
thing. It is
today's big thing, and the FCC (which has been taking only investigative
steps on
the subject) finally is being pushed into action, and fiber carriers
that know they
will have to transition some services to VoIP are getting ready to
listen up and to
speak up.

Wyden's Position

The senator, who teamed with Rep. Christopher Cox (R-Calif.) earlier
this year to
introduce legislation to "indefinitely extend the existing moratorium on
new and
discriminatory Internet taxes," wrote in part, "I believe the emerging
VoIP
technology holds tremendous potential for both consumers and businesses,
and
that the way this technology is treated at the state and federal levels
for
regulatory, tax and other purposes will determine whether the technology
is
allowed to achieve its full potential."

In his Nov. 5 reply, Chairman Powell wrote, "I share your excitement
about the
potential for VoIP technology to bring those very benefits to both
consumers and
businesses. Although still in the early stages of commercial development
and
deployment, the proliferation of broadband Internet connections is
turning
yesterday's VoIP dreams into today's realities. Entrepreneurs are
tapping into the
Internet's potential to provide low-cost voice services to Americans
throughout the
country.

"At the same time, these VoIP providers are introducing innovations
previously
unheard of in voice communications, such as the ability to choose from
over 100
area codes and to take your number with you anywhere in the world as
long as
you can access the Internet," he added. "In addition, investment in
broadband
Internet access and VoIP services are creating small business jobs. U.S.

businesses, small and large alike, are increasingly using these Internet
services to
increase productivity and contribute to our Nation's economic growth."

Powell: Proceed With Caution

Powell also had some advice for Wyden as he and the rest of the Senate
move
forward regarding the Internet tax moratorium, urging caution when it
comes to
VoIP in advance of any FCC action regarding such "new and emerging
services,"
as it "may have the unintended consequence of stifling its growth and
denying the
public benefits of that growth."

Commission staffers are readying a VoIP-related notice of proposed
rulemaking
(NRPM) "to inquire about the migration of voice services to IP-based
networks and
gather public comment on the appropriate regulatory environment for
these
services," the commission says. According to the chairman, "This NPRM
will, in
part, inquire about the migration of voice services to IP-based networks
and gather
public comment on the appropriate regulatory environment for VoIP
services. Over
the course of the next year, after full public comment and thoughtful
consideration
of the record, the FCC plans to follow up the NPRM with a Report and
Order on
the VoIP issues raised in the proceeding." Look to a December
2003/January
2004 timeframe for its release.

What carriers, particularly the CLECs, want to know is how such
companies as
Vonage are allowed to operate a voice business that is neither taxed nor

regulated? The New Jersey- based company claims to have more than 60,000

lines in service, with customers making 3 million calls per week via its
Digital
Voice flat-rate phone service. At a recent CompTel meeting in Florida,
one CLEC
said, "Vonage has the ultimate free ride. It gets everything and doesn't
pay
anything, but the FCC loves it." Another added, "Vonage has an
interesting
business model for freeloading off the Bell system," while another
commented, "If
Vonage and others get a free ride with no federal tax, state tax, access
charges
and universal service charges, they get a 20-percent advantage over
CLECs, who
have to pay for all of this."

The VoIP Forum

The agency, pushed in part by Wyden's letter, ongoing discussions on the
Hill and
in the courts, and questions from carriers, also is putting together
what could turn
out to be an all-day event looking into this hot (and apparently
lucrative)
technology.

The VoIP issue forum is scheduled for Dec. 1 at commission headquarters
in
Washington, D.C. As witnessed by his response to Sen. Wyden, "this is
something the chairman has been following for a long time," says FCC
spokesman Richard Diamond. "VoIP is competition at its best, and it's
clear that
it's time to move forward." While the guest list for the event still is
in the planning
stages, Diamond told Fiber Optics News attendees such congressional
leaders as
Sens. Wyden, George Allen (R-Va.) and John Sununu (R-N.H.) could be
invited
along with state regulators, and representatives from VoIP service and
equipment
providers. For those who can't attend in person, the forum will be
webcast ("and
isn't this the perfect meeting for this?" Diamond adds). There even is
the
possibility of a VoIP conference call to highlight the technology in
action.

>>Sen. Ron Wyden, 202/224-5244; Richard Diamond 202/418-0506<<

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