Speaking of VoIP ;
Internet Telephony Seen As Breaker Of Telco Cartels
(09/05/97; 4:30 p.m. EDT)
By David Braun, TechWire <Picture>WASHINGTON -- Internet telephony is the best hope to smash the world cartel that keeps international phone-call rates artificially high, according to an official from the U.S. Federal Communications Commission this week.
But, as phone calls over the Internet gain critical mass, regulatory issues will have to be handled, said Diane J. Cornell, chief of the telecommunications division of the FCC's international bureau, at a forum organized by the U.S. Department of Commerce's National Telecommunications and Information Administration.
Internet telephony is a 3-year-old technology that lets users make phone calls over data networks. Calls may be between PCs, PCs and telephones, or between telephones.
"We enthusiastically welcome the arrival of the Internet telephony on the scene and hope that it will, over time, provide some real price competition for traditional high-priced international telephone service," Cornell said.
The international market is where there will be the greatest growth potential for Internet telephony, she said, "because obviously international telephone calls are way overpriced."
Internet telephony has significant potential to put pressure on accounting rates and on the excessive profits of international telephony providers, Cornell said, primarily because the Internet's flat rate, non-distance-sensitive pricing bypasses the world settlement system.
The international settlement system is a global treaty used by telephone companies to charge one another for the termination of calls. The FCC is trying to negotiate with foreign regulators a reduction in the charges, which result in U.S. consumers paying out about $5 billion a year to foreign phone companies.
Internationally, however, there remained frustrating obstacles to the Internet becoming a substitute for the circuit-switch network, including things such as network congestion, delays of packet delivery, poor quality, and reliability, Cornell said.
On the overseas regulatory front, there was also a lot of unwise regulatory action, she said.
For example, Hungary has said it would not allow connections between Internet and the public switched network. Portugal said voice services may not be permitted on the Net, and the Czech Republic has issued a total ban on Net telephony.
"Several countries are now contemplating treatment of Internet voice applications under the same rules as traditional long distance service," she said.
"Some ISPs have complained that foreign governments are imposing burdensome licensing restrictions as a condition of operation," Cornell said. For example, the telecommunications authority of Singapore has announced that it would require ISPs to have a basic telecom license if they wanted to provide telephone-to-telephone service.
However, there were also some positive developments, she said. These included a tentative conclusion by the European Union that Internet telephony is not basic telephony, while some some foreign carriers themselves have begun offering or announced that they will offer Internet telephony.
Regulatory policy issues that would evolve as Internet telephony emerged internationally as a viable commercial offering included issues relating to the cost and prices of international telephone calls and what foreign regulators and telcos would do in response, she said. <Picture: TW>
My best guess is this industry ramp is one year away....
Happy Investing,
Jay |
