Thanks, Jochen.
Skypes has been one of the most maligned of all service providers in recent months, based on reviews I've read written by journos and so-called gurus, alike. I find this rather reminiscent, if not ironic, that some would have them declassed from the general regime known as IP Telephony or VoIP. I say that it appears ironic because others in this space, who now enjoy a more dignified stature as service providers of commercial grade VoIP, are now tacitly denigrating Skypes as a toy-like approach, quite in the same way as the early purveyors in this space were once regarded. What does this portend?
Today's NY Times has a nice rollup of players, large and small, while
addressing VoIP issues both regulatory and business model-wise. The
entire article is copied below:
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July 28, 2004
Battle Brews Over Rules for Phones on Internet
By STEPHEN LABATON and MATT RICHTEL
makeashorterlink.com
WASHINGTON, July 27 - Deregulation is the mantra of the main players in
Internet-based phone service, a new technology that could increase
competition and further drive down phone prices.
But behind the scenes, a fierce battle is emerging among rival
companies and between federal and state regulators over the shape of
new government regulations and control of the service, which has the
potential to be the most significant development in telecommunications
since the breakup of the AT&T monopoly 20 years ago.
It may take years for the technology to grab a big share of the
consumer phone market, but telephone and cable companies are moving in
quickly. Last week, Verizon Communications, the nation's biggest
telecommunications company, announced that it is introducing the
service across the nation. Even AT&T, which announced its decision to
retreat from the residential phone market last week, has indicated that
it will continue to sell Internet phone service to consumers.
Supporters of the service generally agree that shielding Internet calls
from traditional telephone regulations would allow the technology to
flourish, leading to reduced costs for new providers and lower prices
for consumers.
But disagreements abound over whether rules on 911 emergency service
and payments to the universal service fund should apply to Internet
phones. Meanwhile, issues that have dominated the phone industry
battles over the last decade - like interconnection fees paid to local
phone companies - have spilled into the debate.
Both Congress and the Federal Communications Commission have begun to
draft changes to the old telecommunications rules, but the efforts are
largely a dress rehearsal for next year.
House and Senate committees have marked up significantly different
measures, and sponsors say there is too little time left in the
legislative session to complete work on the bills. The Senate bill,
adopted by the Commerce Committee last Thursday, would regulate
Internet phone calls more stringently, in a manner similar to current
regulation of traditional telephone services. The House version would
impose less regulation on the service.
The businesses most interested in this debate - telephone and cable
carriers, software providers and equipment makers - have begun to
position themselves for what promises to be one of the most important
political battles of the next Congressional session, beginning in
January.
Federal and state regulators have been fighting over the role of the
states in overseeing the technology. The biggest phone companies, the
major software providers and Michael K. Powell, chairman of the Federal
Communications Commission, have pushed for reduced state controls in
this field.
But the states contend that they have a critical role in protecting
consumers and ensuring access for the underserved and the disabled.
They also maintain that the regional Bell phone companies, which
dominate the local market, are trying to use Internet-based calling to
get around existing phone regulations that have valuable social
purposes.
Meanwhile, the long-running fight over billions of dollars in access
fees paid by long-distance providers to the Bells has moved into the
debate. It remains to be sorted out how much and which carriers will
have to pay other carriers to connect phone calls.
Federal law enforcement officials have also gotten into the discussion
because they say the new technology threatens to undermine their
efforts to tap phone calls. They argue that the law that requires phone
companies to give them instant access to phone networks needs to be
changed to include Internet-based phones.
Further complicating matters is the fact that Internet phone services
will still have to rely heavily on traditional phone networks to
complete a huge volume of calls between users of the new service and
users of the traditional phones.
Mr. Powell has tried to lay down important markers for the debate,
though he may not be at the commission next year when it takes up many
of the issues. He has maintained that Internet calling ought to be put
into a regulatory framework different from that of the traditional
phone system because the Internet technology is more like data
transmission, which is more loosely regulated.
At a summit earlier this month in Silicon Valley, he criticized state
regulators, saying that they had mistakenly concluded that Internet
phone service, in resembling traditional phone service, "looks like a
duck," and therefore should be regulated "like a duck."
"I say maybe the ugly duck is a swan," he said, "and you might want to
leave it alone."
State regulators, however, say they play a watchdog role over
telecommunications companies that may be trying to avoid important
social obligations built into the existing regulatory system.
"It's difficult to really know whether the purported cost savings are
coming from a form of regulatory arbitrage as opposed to real
technological advances and that's the big question," said Loretta M.
Lynch, a member of the California Public Utilities Commission.
She said that state officials are concerned that a rewrite of the rules
could destroy the ability of the states to combat consumer fraud and
eliminate the special funds used to provide services in neglected
areas. For all the hopeful talk about the new technology, she said that
the Bell and cable companies could dominate the new system since they
would continue to control the wires into homes.
"It would be a huge gift to these companies to say they don't have to
play by the rules," Ms. Lynch said.
On the corporate front, the lobbying efforts have included a mish-mash
of blue-chip companies and entrepreneurs whose innovations fueled the
technology but who worry about being relegated to obscurity. Among the
players there are policy divisions and significant distrust.
"We don't have the pocketbooks of Bell South or SBC," said Jeff Pulver,
chief executive of Pulver.com, a consulting and lobbying firm for
Internet-based phone businesses. He said he is unsure of the motives of
the major phone companies, even when they say they are on his side.
The smaller players, Mr. Pulver said, worry that the Bells will push
for limited regulation - vowing unity with the little providers - and
then ultimately take over the industry. Mr. Pulver and some small
companies say they want state regulators to make certain that telephone
networks remain widely accessible for Internet phone services. At the
same time, the small providers differ on several policy points.
For instance, Mr. Pulver does not think the government should require
Internet phone companies to offer 911 emergency service or pay into the
universal service fund, which he says ought to be the responsibility of
the major carriers.
Jeffrey A. Citron, chief executive of Vonage, an Internet phone company
with 200,000 customers, however, said he supports some regulation for
911 service, although he stops short of saying whether it should be
required. He believes the industry should contribute to the universal
service fund, and supports rules that would make it easier for the
government to tap into Internet phones.
As for the phone companies, Thomas J. Tauke, a lobbyist for Verizon,
said that on many basic issues, the major companies "are in the same
ballpark."
"The general consensus is that voice-over-Internet protocol is not a
telephone service," Mr. Tauke said, "and shouldn't be regulated like a
telephone service."
But there are also differences in approach among the phone companies.
AT&T, for example, has asked that any call that moves over the Internet
at any point be subject to fewer restrictions and fees.
R. Steven Davis, senior vice president for public policy at Qwest
Communications, a regional Bell company, called AT&T's position too
extreme. Mr. Davis said Qwest would support somewhat more regulation.
By contrast, he said, SBC Communications has taken the position that
any call that touches the traditional phone infrastructure should be
subject to standard regulations.
Some equipment makers, meanwhile, are trying to steer a middle ground
between all of the combatants and allies.
"I've had meetings with AT&T and some of the regional bell operating
companies," said Charles Crowders, a vice president for government
affairs at Avaya, the largest maker of Internet telephone
equipment. "They'd love to see us take one position or another," Mr.
Crowders said, "but they understand we should be neutral. We're the
Switzerland" of the debate.
Stephen Labaton reported from Washington for this article, and Matt
Richtel from San Francisco. Ken Belson in New York contributed
reporting.
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FAC
frank@fttx.org |
