Dow Jones News Service -- June 28, 1996
FCC Chief Says Internet Telephone Rules Not
Needed
By Scott Ritter
WASHINGTON (Dow Jones)--Technology is quickly making the Internet an enticing
tool for telephone calls, but now's not the time to hobble those advances with
new government rules, the nation's top communications regulator said today.
''We shouldn't be looking for ways to subject new technologies to old rules,'' said
Federal Communications Commission Chairman Reed Hundt. ''Instead, we should
be trying to fix the old rules so that if those new technologies really are better,
they will flourish in the marketplace.''
A group of small long-distance telephone providers this spring asked the FCC to
stop companies from selling software that allows people to use the Internet for
voice conversations.
The group, the America's Carriers Telecommunication Association, says the FCC
should regulate the Internet as a ''basic telecommunications service,'' like
traditional phone companies. The FCC is currently considering the group's
petition.
Internet telephony, while still far from the mainstream, is growing in popularity.
Advances in software have improved voice quality and made it a more reliable
alternative to traditional phone service. It's also vastly cheaper, allowing users
with compatible software to make long-distance and international phone calls for
the price of an Internet connection.
A growing number of Internet voice products are on the market, including
VocalTec Ltd.'s (VOCLF) Internet Phone and Quarterdeck Corp.'s (QDEK)
WebTalk. Other companies, like Intel Corp. (INTC), Microsoft Corp. (MSFT) and
Netscape Communications Corp. (NSCP) have similar products in the works,
according to an industry coalition formed to fight the petition.
Hundt's remarks are certain to reassure software makers. Already, the Clinton
administration has signaled its reluctance to impose rules on new Internet
technologies.
''The commission should not risk stifling the growth and use of this vibrant
technology in order to prevent some undemonstrated harm to long distance
service providers,'' Larry Irving, assistant secretary for communications and
information, said in a recent letter to the FCC.
Irving heads the Commerce Department's National Telelcommunications and
Information Administration, the principal advisor to the White House on
communications issues.
Lawmakers have also weighed in on the issue.
''The Internet does indeed pose new challenge to regulators,'' Rep. Christopher
Cox, R-Calif., told commissioners in a Capitol Hill hearing earlier this year. ''But
these can also be opportunities for the current FCC to show that it will not return
to the regulatory thicket ...''
The America's Carriers group contends that Internet voice traffic will unduly
burden the telephone infrastructure. The group, in its petition, also argues that
Internet telephone service providers don't pay their fair share to ensure
telephone service is available in rural and high-cost areas.
''If the commission is serious about carrying out Congress's mandate that
competition must drive the new telecommunications marketplace, then it must
ensure that Internet telephony will foster, not stifle, such competition,'' the
petition said.
The U.S. isn't alone in debating the issue. Other countries, including Canada, are
also discussing Internet telephone service, the FCC's Hundt said.
''I am strongly inclined to believe that the right answer at this time is not to place
restrictions on software providers, or to subject Internet telephony to the same
rules that apply to conventional circuit-switched voice carriers,'' he said in
remarks prepared for delivery to the Inet '96 Conference in Montreal today.
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