Ed, Glad you are enjoying the exchanges.
During the past two days there have been many spins on the FCC's positions, if you can call them that, which were rendered Friday, concerning how they will regard the effectively still-nascent VoIP market place. You have in all likelihood already read two of them: One by the WSJ, one by the NY Times. You can refer to Francis Gaskins' FCC thread for the different versions.
The Washington Post's is copied here as well, below.
The dailies cannot seem the get synchronized on the meat of this matter. Nor can the FCC. It's no wonder.
The FCC's rules and regs were not written to take into account all of the many permutations of voice services that are now emerging. With regard to now-available services by some of the carriers, the ones which merely use the same old architectural templates of the traditional Interexchanges, but substitute the VoIP protocol on IP nets as the 'inter-machine' trunks, I think that the old rules will still apply. I could be wrong, as Zebra's thesis points out is always a possibility.
But the way I see it, rulings are about to come down against them in many instances, if they are using the LEC's end-office switching and administrative infrastructures for ingress/eggress, i.e., to either originate or terminate POTS-like calls.
Today's variety of primordial gateways used in this template are only the tip of what will be, down the road, viewed as mainstream solution sets, since the micro/DSP-based variants now becoming available, with protocols engrained in software in routers, access equipment and cable modems are only recently beginning to wake up and say 'Good Morning, Mom.'
No doubt, mom and her offspring will embrace these newer technologies like no startup could even begin to imagine. And they will have the subscriber bases and the test beds to do it up right, as painful and unfair as this may seem to some. But this is the way it works, if you want to take the long view. Near term, there will be arbitrages of sorts that will enable fortunes to be made based on the short kill. And a selected few of the upstarts will survive the turmoil that will ensue, and go on to join the ranks of the titans.
One possible salvation that I can see for the general class of neophyte service providers may reside in the FCC granting them a form of pioneer status, a tactic that has been used in the past where emerging technology startups face off against incumbent monopolies. But this becomes a contaminated issue because many of the recently announced VoIP service offerings, and not ironically the larger ones, are coming from established carriers, or those who profess to be interexchanges, and conceivably the issue of equal and comparably applied rules will apply to all. We shall see.
Frank Coluccio
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Internet Carriers To Face Phone Fees
FCC Plans a Case-by-Case Approach
By Mike Mills
Washington Post Staff Writer
Saturday, April 11, 1998; Page D01
Federal telephone regulators said yesterday that they plan, on a case-by-case basis, to force companies offering long-distance service on the Internet to pay fees to local phone companies whose wires carry the beginning and end of the calls. Such fees could force discount phone services using the Internet to as much as double the rates they charge consumers.
But the officials stopped short of any broad rules that would force all such companies to immediately begin making the payments, which traditional long-distance companies already do.
In a report to Congress, the Federal Communications Commission said it would wait for local phone companies to complain that Internet long-distance companies are not paying for access to their networks before taking action against specific companies.
With that approach, the agency hopes it can blunt criticism that it is imposing fees and regulation on the Internet as a whole, analysts said. The Clinton administration, in a letter Thursday, reiterated its view that the FCC should "do nothing that would thwart the growth and vibrancy of the Internet."
"We are not regulating the Internet," FCC Chairman William E. Kennard said in an interview yesterday. "We are identifying a narrow class of service that uses the Internet protocol for telecommunications services. . . . This technology really is at the intersection of the telephone network and the Internet. Is an Internet call, phone-to-phone, the functional equivalent of a long-distance phone call over the network? The answer is: It certainly looks a lot like it."
Republican commissioner Harold Furchtgott-Roth was the only agency member to vote against the report. "If we're distinguishing phones from computers, it begs the question of what the difference is between a phone and a computer," said his chief of staff, Paul Misener. He said his boss "opposes the imposition of an old regulatory structure on a new regime."
Typically, long-distance carriers pay local phone companies fees of 5 cents per minute to begin and end phone calls on local telephone networks. But lately it has become possible for a new kind of long-distance firm to bypass this system by carrying calls over the Internet in the form of information "packets," rather than through telephone circuits.
By avoiding access fees, the Internet services can offer calling for as low as a nickel a minute. Such companies include IDT Corp., Qwest Communications Inc. and even AT&T Corp., which next week plans to offer an Internet phone service on a trial basis in selected cities.
The FCC likely will get its first complaint soon. Officials at BellSouth Corp., a large local telephone company, said it will immediately begin charging access fees to companies that use its network and advertise Internet phone service.
"We're regarding them as long-distance companies in Internet clothing and they're required to pay access charges," said BellSouth spokesman John Schneidawind.
Kennard emphasized that the FCC report also declares that Internet service providers in general will still be classified as "information services" and will not be subject to any additional telecommunications fees or obligations. "We're not saying ISPs should pay access charges," he said.
c Copyright 1998 The Washington Post Company
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