Moving forward on VOIP

According to Telephony magazine:

“The FCC is planning to open a proceeding on VoIP near the end of this
year. Last week, Christopher Libertelli, senior legal advisor to FCC
Chairman Michael Powell, speaking at the U.S. Telecom Association
conference in Las Vegas, said the commission could develop three sets
of rules based on the different methods of provisioning VoIP services:
via private networks; over networks that touch the PSTN; and via
evolving peer-to-peer networks.”

I need to think about this some more, but my initial gut feeling is
that the proposed approach won’t work.  There’s a reason it’s
called the inter-net.  It’s a network of networks.  If the
law chases particular network configurations, it just pushes companies
to engineer around the rules.  Just look at how the death of
Napster has shifted P2P file-trading to more decentralized systems like
Kazaa.  

I’m not sure what’s gained by dividing the VOIP world up into these
three categories.  If a network is truly private, not
interconnected to the outside world, like a secure intranet behind a
firewall with no traffic going outside, why would the FCC even think
about regulating applications on that network?  Anything that
touches the public Internet (i.e. everything but the first scenario)
touches the public switched telephone network at some point.  And
“evolving peer-to-peer networks” can be in either category. 

It sounds like the FCC is trying to update the distinction in its 1998
report to Congress between “phone-to-phone” and “computer-to-computer”
VOIP.  I was very involved in drafting that report, which I’m
convinced was the right approach at the time.  However, the basic
framework is ultimately untenable.  All computers are phones, and
an increasing percentage of phones (including all wireless ones) are
computers.  Many things that are neither computers nor phones,
like Vocera‘s clip-on badges, are
now VOIP devices.  The point of the end-to-end principle is that
the ends of the Internet are malleable. 

If the legal requirements change when an end user swaps a computing
device labeled “phone” for one labeled “computer,” the rules will
fail.  The real issue here is that basic voice service is going to
be deregulated.  There is no way to put the VOIP genie back into
the bottle without destroying it.  Owners of monopoly
infrastructure (both physical and logical) should still be regulated,
because otherwise they will prevent competition and innovation at
higher levels.  The link between that regulation and voice phone
calls needs to be broken. 

The question is whether the FCC will use its skill and creativity to
take the great leap forward, or will essentially dither until Congress
is forced to pass a new Telecommunication Act in 2008 or 2010.  A
new statute is the right answer, because the old law is fundamentally
tied to the outdated old communications paradigm.  But we won’t
get a new law any sooner even if Congress starts now, because of the
interests involved.  What’s at stake now is the path of the
communications industry over the next five to seven years.  VOIP
could kickstart the economy and the technology sector during that
period, but only if regulators do the right thing.