Regulators Should Keep Hands Off VoIP, Industry Group Says

Federal regulators should continue taking a hands-off approach towards companies building Internet-phone services in order to avoid stifling innovation within the nascent industry, an industry trade group said Tuesday.

In a filing with the Federal Communications Commission (FCC) in Washington, D.C., the Voice on the Net (VON) Coalition said services evolving around voice over Internet protocol, or VoIP, technology would be severely hampered by federal involvement, particularly if the government bases regulations on those governing traditional telephone service.

The coalition, which includes AT&T, Microsoft, Intel, and Texas Instruments, advised the FCC to continue with its hands-off policy to foster innovation.

"VoIP should be an unregulated information service, and it should be exclusively under federal jurisdiction," VON spokesman Jim Kohlenberger said. "Congress and the FCC have generally had a hands-off approach to Internet services, including data, voice, video, and email. That's been a successful policy that has really allowed the Internet to flourish. New Internet communications technology can benefit from that same enlightened policy going forward."

Daryl Schoolar, analyst for technology researcher In-Stat/MDR, agreed with VON's position, saying too few businesses and consumers are using Internet phone services to warrant government regulations."The government needs to give VoIP some time to grow as a service to see how it's going to be used," Schoolar said. "We need to let end users determine what the services will eventually be before the government steps in and sets regulations."

VON believes the FCC should be the only government body regulating VoIP to avoid a mishmash of regulations that would result if separate rules were imposed by individual states.

In setting standards for 9-1-1 emergency services, VON prefers to develop the technology in conjunction with the National Emergency Numbering Association, a non-profit group dedicated to the study and implementation of 9-1-1 across the nation.

VON is also advocating an overhaul of the government's Universal Service Fund. Telephone companies collect the fee from customers and the money is used to pay for telephone service in rural areas and to bring Internet service to schools and libraries. What customers pay today is determined by the number of minutes used in long-distance calls. VON favors a flat rate based on either the phone connection or telephone number.

VoIP as an alternative to traditional telephone service has gained corporate interest, as the Internet becomes the universal transport for all voice, data, and video communications worldwide. Packet networks are less expensive and more scalable than are traditional circuit-switched telephone networks, and naturally integrate with Internet-based applications.0