17 October 2013

“VoIP” (Voice over Internet Protocol) is the technology that allows phone calls to be transmitted over the Internet instead of the traditional legacy system, which transmits phone calls via copper landlines and cellular phone towers.

VoIP has seen a massive gain in popularity in the US over the last 10 years. According to the latest PEW study, 40% of all US residents and 60% of US businesses have used VoIP technology, and this percentage continues to increase due to cheap international VoIP calling plans, and mobile “softphone” applications. The recent surge in VoIP usage has not gone unnoticed by the Federal Communications Commission (FCC.)

VoIP has classically been considered an Internet technology, not a telecom technology. This difference in definition is why VoIP has not been strapped with as many regulations and taxes as traditional telecom providers, like Verizon and Sprint. However, Bloomberg BNA reports that more regulations may soon hit VoIP providers as the FCC struggles to redefine (and tax) the next-gen technology. Here are some of the changes the FCC has in store for VoIP service:

Anti-discrimination laws for residential and business VoIP

There first order of business for the FCC is to somehow bind antidiscrimination law to VoIP service providers. Traditional phone providers are already required to adhere to anti-discrimination laws, but until now, there has not been a corresponding regulation in place for VoIP providers. The FCC anti-discrimination laws are intended to ensure that no user is turned away because of race, gender, or sexual orientation. The larger providers are against this regulation because it forces them to provide service in underprivileged areas where the return on investment does not cover the cost of removing public-use legacy systems and replacing them with a VoIP system. The FCC ostensibly wants to ensure that lower income area have access to VoIP phone service too. The larger picture is that once they bind VoIP to Anti-discrimination laws, the FCC has precedent to begin regulating and taxing VoIP providers up the wazoo.

VoIP phone accessibility during a natural disaster

The FCC also wants to add a disaster accessibility clause to VoIP providers. There are backup devices like a Universal Power Supply (UPS) battery which connects VoIP back to the Internet when the power goes out, but VoIP providers are not currently mandated to offer this backup device with their VoIP service package. This new FCC regulation would guarantee users that their VoIP service will function, should the network suffer some catastrophic damage. This is especially important following a natural disaster so that users have phone access to emergency agencies like the fire department and medical care facilities. Alternatives to a UPS are already springing up however, like the Google “Loon” project that can launch remote “wireless chargers and transmitters” on large weather-type balloons. The balloons are part of an attempt to provide better, more reliable Internet service and are still being tested in New Zealand.

VoIP service free from monopolies

Another goal of the FCC is to prevent industry monopolies from forming between VoIP providers. Monopolies eliminate competition, which drives up prices. As expected, the major phone providers that offer VoIP service, such as AT&T and Verizon, are not happy about these proposed regulations, as they feel like it will hinder their business and growth. Smaller VoIP providers welcome changes so that they can compete fairly with the larger corporations. Regulated competition translates into more options and cheaper prices for VoIP users.

The FCC has bigger plans for VoIP than regulation. Their designs are leaning toward control. There have been recent reports from the Washington Post that the FCC is planning to open up a nationwide public WiFi network. Several high powered tech companies like Google and Microsoft support this public WiFi plan, and joined 300 other organizations in group letter to the Subcommittee on Communications and Technology to endorse the plan of free nationwide WiFi service.

Battle lines in the debate

Not surprisingly, traditional phone providers like Comcast and AT&T are against the nationwide WiFi plan. The wireless industry is worth $178 billion dollars, and the major players like Verizon and AT&T don’t want to lose business to free service like VoIP. The battle lines in the debate are drawn on the same “difference of definition” premise: Google wants a free public network because they look at VoIP as an Internet commodity and ubiquity of service means less infrastructure cost for them, to run their products. AT&T looks at VoIP as a telecommunications commodity that people just won’t stop giving away.

There are big things in store for VoIP providers and users. The FCC has not announced when these new regulations and public WiFi might go into effect, but letters of displeasure from major wireless providers and letters of endorsement from large tech companies to the FCC seem to indicate that changes might come sooner rather than later.

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