It has become apparent recently that the FCC will likely modify their standards for regulating telecom services in the US based, with VoIP as the rising star of the industry. Up until recently, the FCC did not regulate VoIP as a telecom service because VoIP straddles the line between a telecom service and an information service (like the Internet, as VoIP is, after all, an Internet service). Whatever decision the FCC reaches, consumers will eventually begin to notice changes in the ways their telecom services are taxed and charged.
A Changing Marketplace: An Aging Infrastructure and IP Innovations
“VoIP”, or Voice over Internet Protocol, is a general name for the technology behind Internet telephone service. With VoIP, service providers use Internet Protocol (IP) addresses to relay packets of digital voice data between subscribers, much in the same way analog telephone service providers use copper telephone lines to relay analog voice data between subscribers via phone numbers.
Original VoIP phone service technology was very simple, and could only be used between two people using the same service with softphone programs on their PCs. Today, subscribers can use hosted VoIP from any phone, smartphone, computer, or tablet to call any phone number, whether that number is hosted by an IP or an analog service provider. Many people have already switched to VoIP service for their landline phone service in their homes and offices because VoIP is much cheaper than traditional phone service with a traditional provider, around $5/month with a residential VoIP provider, and around $10 to $20/month per extension with a business VoIP provider.
The VoIP industry has grown up very quickly from its primitive early form. VoIP is not only cheaper for subscribers to buy, it is also cheaper for telecoms to provide. The analog telephone network (the PSTN, or public switched telephone network), is in constant need of expensive repair, and as a result, many telecom providers have replaced much of their internal systems with a VoIP infrastructure.
As a result, the FCC has has determined the VoIP industry has become too large and prevalent to go on growing unchecked. But the move towards legislative measures to regulate VoIP has received some mixed responses from service providers and critics.
Where does the phone start and the computer stop?
Firstly, the FCC must determine if they will regulate VoIP as a telecom service or as an information service. If VoIP is ruled an information service, the FCC will continue to leave it largely unregulated.
However, if they do start to regulate VoIP as a telecom service, VoIP providers will become subject to all of the same laws and protocols that regulate analog telephony providers. For many of the telecom giants, VoIP service has been a sort of work around, and many were using VoIP systems for a large percentage of their customers, though their customers might not have even recognized that their service was technically VoIP.
Accordingly, many of the bigger telecom providers object to the proposal to change the way VoIP is regulated. If VoIP were regulated as a telecom, VoIP providers would have to satisfy regulatory measures that guarantee that VoIP is reliable and dependable in emergency situations, and that E911 (Enhanced 911, the 911 service particular to VoIP providers) is equivalent to its analog counterpart.
Regulation would also protect smaller providers against unfair competition with the bigger telecoms, and would ensure that all VoIP providers offer service to all customers with equal preference (that is, free of discriminatory policies). Finally, regulation would guarantee that telecom providers make the transition to VoIP services easy and seamless for all customers.
So what will change in the next five years?
These new regulatory measures may slightly affect the price that customers pay for phone service. VoIP is a cheap technology, so customers will likely save money on their phone bills when they switch to VoIP systems, but there may also be some new expenses associated with service as providers have to pay regulatory fees and taxes associated with the status of telecom service. For most small providers, these fees will be negligible, but for some of the bigger telecoms, fees could become prohibitive, or at least inconvenient.
For many analysts, the eventual move away from PSTN services and towards VoIP services was inevitable. In fact, many are pushing for telecoms to make efforts towards having the PSTN completely disabled by goal year 2018. If telecoms really do meet that goal, then customer reliance on VoIP (along with cellular service) will be total.
There are some who still resist the move towards total VoIP systems. For example, some legislators in Kentucky recently tried to make it mandatory for area telecoms to continue to provide PSTN service to all customers. Legislators in Kentucky mainly worried that elderly residents would be unequipped or unable to successfully get VoIP service. However, such fears are generally unfounded. With VoIP changing in status to a regulated telecom service, laws stipulate that providers will make the transition universally seamless.
However, news of these changes (or potential changes) have not caused much of a stir with the general public. There may shortly be massive changes to the American communications system, but many people are unaware because of the highly technical nature of the changes. However, customers will start to notice phone bills that, in one way or another, reflect an evolving telecom system before the end of this year.
Rachel Greenberg writes about technology, telecom news, VoIP phone service, and business improvement methods for VoIPReview.org.