Phone companies try to position themselves as winners in VoIP regulatory battle
Friday, April 05, 2013 9:08 AM
As technology evolves, companies are trying to position themselves to be regulatory winners – or at least avoid being losers.
The most recent example is with Voice over Internet Protocol (VoIP), which basically refers to providing telephone service over the Internet.
AT&T Inc. is petitioning for the Federal Communications Commission (FCC) to keep VoIP service largely deregulated and to give companies more ability to move customers from what it calls traditional phone lines to VoIP.
The Iowa Utilities Board in January agreed to consider deregulation of VoIP in Iowa, but is also looking at VoIP in the context of all communications regulation, not necessarily as a stand-alone issue. Comments for the notice are due midyear.
The issue centers around the fact that AT&T wants to move customers from traditional phone lines – the public switched telephone network – to Internet-based phone service. The company want to do it without putting as much money into the traditional lines, while some representatives of smaller phone companies point out that wire-line maintenance is necessary for Internet phone communication.
Rick Boucher, a former Democratic congressman from Virginia, was in Des Moines last month for a Heartland Technology Alliance event. He spoke to a room full of local telephone and Internet providers as well as representatives from the state and other technology stakeholders.
Boucher,who spent much of his political career working on Internet-related issues, asserted that deregulation leads to innovation. He spoke of what he referred to as “old” technology – essentially, landline phone infrastructure. VoIP has largely been unregulated.
AT&T and other large companies have been required to maintain funding for the old network, even though AT&T transitioned 75 percent of its network to using VoIP, Boucher said.
“The dollars (AT&T) spends maintaining the network that people don’t want anymore, and are leaving, are dollars the company cannot invest in the more modern networks that the customers have expressed preference for,” Boucher said in an interview with the Business Record. “So the whole goal of the IP transition from an economic sense is to encourage the flow of dollars out of less-productive infrastructure into more productive infrastructure.”
Dave Duncan, president of the Iowa Telecommunications Association, which represents more than 130 community-based telecommunications providers, disagrees with giving separate regulations on VoIP. He points out that “there are no new lines versus old lines.” In other words, VoIP technology still uses the same copper, coaxial cable and fiber lines as traditional phone service uses, just in a different way.
Duncan applauds the Iowa Utilities Board’s approach, which he says considers VoIP within the bigger picture of all telecommunications technology, not in its own bubble.
A key point of Boucher’s talk was that less regulation equals more private innovation. Duncan points out that his organization is not trying to hold back innovation, but wants to make sure regulatory laws aren’t passed in a piecemeal way.
“Stated differently, if some degree of reduced or limited regulation is appropriate in the telecom marketplace, why should it be limited to VoIP?” Duncan said.
He wants the regulatory environment to not create winners and losers, which he thinks AT&T’s proposal would do. By giving separate regulations for VoIP service, local companies that currently don’t use VoIP will face more regulations than VoIP providers even though VoIP providers are using parts of the same network.
“This is one network connected with lots of different things,” he said.
Boucher doesn’t see it as an issues of big companies vs. small companies.
“It makes sense for every rural phone company, every regional (phone company) and the nationals like AT&T to have this transition happen,” Boucher said. “Because they’ll benefit from it in their region just as AT&T does in its region.”
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