FCC Decisions Impact VoIP, Broadband

Many enterprises would like to see broadband access and telecom as a purely free-market exercise. Not likely. Under the Bush administration, the Federal Communications Commission has had a real effect on developments in both cable broadband and the telecom market.

The biggest development right now in telecom, of course, is voice over IP service, with companies rushing to get a foothold now while the market remains wide open. VoIP technology is finding its way onto all sorts of devices"Toshiba has a VoIP-enabled PDA, and two vendors have announced mobile handsets that combine Wi-Fi and VoIP functionality"and Time Warner this week roiled the market by offering VoIP over its cable lines in 27 states.

With developments moving so quickly, the FCC's decision to convene a study group beginning next month may seem slow. But the FCC will have a great deal of sway on the VoIP market"with the power to determine whether the service should be regulated and"not incidentally"taxed

Companies such as Cisco with a serious stake in VoIP success are lobbying hard for an unregulated market, and FCC Chairman Michael Powell, no fan of regulation in general, has already indicated that would be his preference as well. The FCC's Internet Policy Working Group, therefore, will have much to say about the immediate shape of the market, assuming it moves reasonably quickly.

The FCC's drive to determine broadband cable access, though, has been slowed by federal court decisions at the appeals circuit level that have so far gone against it. The FCC position that cable networks should be open to any company, the way telephone networks are, may seem inconsistent with its general anti-regulatory bent. Still, the commission's willingness to appeal the verdict to the full 9th Circuit Court of Appeals and, probably, the U.S. Supreme Court, keeps that ball in play for a while longer and cements FCC influence over the issue for now.