Vonage: National Policy Needed For VoIP

Vonage CEO Jeffrey Citron talks about the need for a national VoIP policy, and why intercarrier compensation rules need to be overhauled.

March 12, 2004

2 Min Read
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Jeffery Citron, CEO of Voice over IP provider Vonage, talks fast because he has to -- there's ony 24 hours in a day, and still a lot of work to be done educating people about Voice over Internet Protocol (VoIP) communications, and why VoIP shouldn't be constrained by the telecom regulatory procedures of the past.

Networking Pipeline caught up with Citron after he participated in a panel discussion Wednesday at the Network Outlook conference in Redwood Shores, Calif., and slowed him down long enough to get his thoughts on several matters including VoIP, the FCC, and intercarrier compensation.

Networking Pipeline: If you were chairman of the FCC, what is the first thing you would do?

Jeffrey Citron: Quit. (laughs.) Seriously, in the VoIP arena, the first thing I would do is declare that all forms of Voice over IP communications are interstate in nature. That would bring so much clarity to the market. It made a lot of sense for the cellular market, and I think if there was such a declaration there'd be a lot of support behind it. Right now, the genie is out of the bottle regarding VoIP. The only thing that could derail the momentum is if the states start getting aggressive about regulation.

Networking Pipeline: You've talked about the need to rethink intercarrier compensation and universal service. Can you expound a bit?Citron: Sure. Universal service is a great idea -- but for some rural markets, what made sense years ago is not appropriate anymore. In real rural areas, we still need to support the delivery of advanced services. But there are some rural markets where you can already get broadband and voice services over [TV] cable; so you have to ask, do those users still need government support?

Compensation is one of the more complex problems. We've been calling for an overall reform of the policies, one that unifies all compensation issues. Right now, I can provide voice service to Hong Kong [from the U.S.] for a cost of 1 cent per minute, which I can sell for 2 cents per minute. In New Jersey, if you want to provide service across some invisible line of demarcation, it costs you 6 cents per minute. Something's broken here, and we've got to fix it.

Networking Pipeline: How much time does Vonage spend fighting legal battles and countering lobbyists from the opposition?

Citron: Just in the Minnesota case, we spent millions just on legal fees. And I'm off to Washington again tomorrow, for more tesitmony. It's really a drain on resources, because a lot of people don't understand the technology, and we have to spend time explaining it over and over. That's why it'd be so helpful to have a single national policy. We just can't spend the time fighting 50 different policies in 50 different states.

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