Why VoIP Makes Telecom Regulations Irrelevant 341
An anonymous reader writes "BusinessWeek Online analyzes why state and federal regulators' attempts to label VoIP (Voice over Internet Protocol) a "telecommunications service" is wrong - and threatens to undermine the technology. It quotes Vint Cerf as saying: 'To single out VoIP as a telephone service is a terrible misunderstanding of the Internet industry. I would submit that, someday, the phrase Internet telephony will sound as archaic as 'horseless carriage' sounds today.'" We've also recently discussed Vonage's attempts to fight telecom regulation in Minnesota.
Regulation Kills (Score:5, Insightful)
KEEP YOUR GRUBBY HANDS OFF.
A free, open internet has done wonders for this country economically and technologically. Yet they continue to turn and backstab the free and open system.
damn... damn damn.
I'm not sure I understand why... (Score:4, Insightful)
...can someone perhaps explain?
Traditional telephony lets people talk at a great distance and travels over telco lines. And gets taxed.
VoIP lets people talk at a great distance and travels over telco lines. And does not get taxed.
What is the difference? A matter of what the encoder/decoders look like? A matter of historical roots of VoIP emerging from a (presumed) free technology?
I want free phone calls as much as the next guy, but I'm not sure I understand why VoIP is so different from traditional phone calls. (Or for that matter, why email and AIM are not subject to taxation too, since they also travel over the same telco system, but even mentioning this greatly increases my troll-likelihood.)
because they're just data (Score:5, Insightful)
Re:I'm not sure I understand why... (Score:3, Insightful)
He shouldn't argue that telephones and VoIP are essentially different. He should argue that VoIP and WWW are essentially the same. If you debate, we could make some VoIP phones that use HTTP as a transport.
Re:I'm not sure I understand why... (Score:3, Insightful)
Lawmakers need to remember why these fees were put in place to begin with. They're not just taxing calls for fun. (some of) the fees associated with normal phone calls are to compensate phone companies that had invested a great deal of money creating the infrastructure of the telephone system. This doesn't (or shouldn't) apply to the internet because the government created most of the infrastructure of the internet.
Balanced decisions anyone? (Score:5, Insightful)
I've seen all the stuff about Vonage here in Minnesota. Vonage advertises constantly, but given that my broadband provider is Comcast, I wouldn't exaclty WANT to rely on that service staying up, and that's what worries me about how VoIP is marketed by a lot of places.
It's great that for only $39.99 (plus broadband, easily $45/month) I can make calls all across the nation. Sounds nifty. And yes, it's increased competition. But unfortunately, Vonage makes little fuss about the fact that if your broadband provider goes down you're screwed. How about those 911 calls?
For very close to the same prices, I can get MCI's The Neighborhood plan with DSL here. Same thing with Qwest now. Yeah, I'm paying extra taxes, which sucks, but they are required by law to give me service. There's a maximum amount of downtime they're allowed, and I can call 911. I use The Neighborhood without DSL now, and even if the power goes out, I can still make calls.
Given this nation's power grid and the lack of good service contracts and requirements for uptime with broadband providers, I don't think I'd like to trust VoIP anytime soon here.
So, VoIP people, get back to me when you're willing to submit to some regulations for the quality of service.
Re:Don't want to register? ARTICLE TEXT below (Score:2, Insightful)
The parent post needs to be modded down. Read in there carefully. It was un-neccessary, and I highly doubt it was in the origional article. Not that it was any better to quote it, but how else will people see it?
Re:I'm not sure I understand why... (Score:2, Insightful)
What _is_ VoIP, and when is it enough like a phone call to make it taxable as such? Does it need to touch the normal phone system? Does the VoIP system need to have the capability to rout to the normal system? Is it taxable VoIP if I run Gnomemeeting to talk with a friend? If we use picture and text, but not voice? Only text - is IRC a 'phone system'? Is it a phone system if the IRC user is deaf? Is it phone if I record a message and send it via email?
The point of the article is that it no longer makes sense to regulate various forms of communication in isolation, as the different forms aren't isolated anymore.
A pox on everyone's house (Score:5, Insightful)
Did everyone sleep through the blackout of 3 weeks ago? VOIP didn't work. Cel phones didn't work. Land lines worked. Why? The fundamental reason is regulatory requirements that ensure a certain level of reliability. Those requirements date from a different era - lord knows they'd never pass in today's "pro-business" climate. Imagine if everyone had been using VOIP and there were no self-powered phone network? I hope you have a ham radio license!
The entire purpose of regulatory bodies is to shape the market such that companies act in ways beneficial to the public interest, where absent regulation they would be inclined to cut corners for short term profit, setting up everyone for a disaster in the long run.
Why can vonage sell unlimited phone service for $40/mo? They externalize all the costs of line maintenance. If your broadband service fails, you have no phone, and it's not Vonage's problem to rectify it.
Personally, I can't stand ILECs and in fact don't have a land line myself, but the dogma that telephony shouldn't be subject to regulatory requirements if it uses the internet doesn't sit well with me.
Of course, if internet service was as reliable as electric service, or if either were as reliable as phone service, this wouldn't be an issue. But the reason the land-line phone service is reliable is gov't regulation.
-Isaac
Re:10-10-$NUM (Score:3, Insightful)
Reliability Issue (Score:4, Insightful)
The problem I have is that my landline telephone has been more reliable (way more) than either the electricity or the broadband. I am hesitant to tie my telephone service to the broadband, since if it goes out, I have no telephone and no way to call and say that I have no telephone.
Its like those helpful suggestions while on hold with the broadband folks to visit their website, when you're calling them because you can't visit any website.
Catch-22. Chicken-and-the-egg.
You've got your history wrong (Score:3, Insightful)
Not all ISDN is a price rip off, there are apparently some tarifs for it in the US that undercut regular POTS prices.
ISDN was simply too complicated, too late, and too slow.
Re:A pox on everyone's house (Score:5, Insightful)
Right. And whose fault is it that your broadband service failed? Your broadband service provider! Who should be taxed and regulated? Your broadband service provider!
Historically the physical infrastructure has been tied to phone service so completely that the laws for both have become joined. Now that the service can be separated from the infrastructure, the laws need to be revised. Broadband providers should be subject to regulation and taxes much like phone companies today, to guarantee adequate service to everyone. Internet telephony companies should not be subject to very much regulation, if any.
Re:Anyone else sick of (Score:2, Insightful)
Large ossified businesses don't want to compete with small agile businesses. The easiest and cheapest way to do this is to tax and regulate the small business out of business [sic]. It's nothing new. The guilds of the medieval and renaissance eras performed only one function, to lobby the king to pass laws keeping competition at bay. Unions today do much the same thing on the other side of the coin.
The current crop of regulations means that a business must employ of lawyers in order to understand and thus stay on the right side of the law. This is not a problem for large businesses. But a small business just can't afford it. Regulations that are mere nuisances to entities as large corporations, but which serve to keep others out of the market, will be supported by the likes of AT&T, IBM, Siemens, GE, Motorola, Philips, etc.
The problem with big companies (Score:5, Insightful)
Little startups figure out ways to make money off the new technology, because they're not so entrenched. Massive megacorps trying to adapt to new technology are like covered wagons trying to chase a bee. As much as they'd like to catch that bee, they just can't maneuver fast enough. So rather than let somebody else eat their honey, they pass a law requiring that the entire prairie be filled with bug spray. "Bees can sting!" they say, ignoring the fact that bees make edible products.
Eventually, they get the covered wagon heading in the right direction, they roll on up to the bee carcass now lying in the road, and then "relent", "embracing the new technology". I.e., through legislation they've succeeded in making technology no longer a moving target, and now they want their piece of the action.
I don't think it's surprising that many of these technologies are proving somewhat resistant to legislative bug spray. People are still swapping music and movies, people are still using Internet telephony and listening to Internet radio. Evolution will naturally start to produce tech that can't be hurt by legislative bug spray.
Re:because they're just data (Score:3, Insightful)
There are two ends to a phone call. (Score:5, Insightful)
But the other isn't. In fact, it's that non VOIP other end that allows Vonage to exist at all.
Anyone who says Vonage isn't a telephone service doesn't understand the system.
See, if two people had broadband(a requirement for the Vonage system) they could talk in stereo sound with video added for..... NOTHING.
That $40 a month Vonage charges people is for the phone system/internet interface it offers. Nothing else.
If EVERYONE had a broadband connection tommorrow, Vonage would file chapeter 11 the following day.
Vonage uses the existing phone system for half or more of it's buisiness, it should have to support that system like every other buisiness that profits from it's existence.
Re:it's a convoluted form of regressive taxation (Score:2, Insightful)
So first you tax the traffic, then, to protect and grow the revenue stream...
You give per-MB tax breaks to the carriers
You get your tax revenue, the bandwidth providers get an incentive to provide more and more bandwidth, new bandwidth-heavy applications become feasible and start to appear, this year more MB move than last year...
loop...
And I finally get that groovy videophone they promised when I was little in the 1970's*
Next step the Hilton Orbital!
TomV
* with a really long curly cable, of course.
Re:Anyone else sick of (Score:5, Insightful)
Big business has money, but only government can turn that money into power. Without the aid of government, big business would have no more or less power than you or me. Let's address the root of the issue, not the symptoms.
Re:Carriers AREN'T carrying calls over the 'net (Score:3, Insightful)
For a demonstration take a look at the recent blackout in the NE USA & Ontario. Line phones kept working, exchanges had battery backups, 911 service was in place (unless it failed at the far end as it did disturbingly often.)
Cell phones? Many were deaders. Cable TV? Often the same. So the VOIP providers are getting to skip out an a lot of responsibility that the local monopolies can't.
Further then that the issue isn't local monopolies getting to charge for calls coming over their service, the bigger issue is that soon they won't ever even know about the calls for increasingly many folks.
Vonage works by going over your own high-speed service. That could be some flavor of DSL, or cable, or 802.something, or eventually some sorta ultra wideband decentralized mesh with reverse polarity neutron switching. In any case packets are packets and it'll be part of a flat rate.
Then the monopoly ain't worth a darn but the responsibilities remain the same. The poor, the clueless, the mandated, the emergency services, they'll all continue using the local monopolies while the high value cream (at least as the monopolies see it) abandon them for the alternatives.
They're freaked.
A couple years ago the panacea was going to be getting to handle long distance. Now the economics of that look nearly as bad as local service. Data? Glutted in a market the locals don't have the capitol or freedom to go into. Convergence? Nifty tech keeps getting developed but doing increasingly clever things with twisted pair is expensive.
Most folks see a complete rewrite of the market, from regulations to pricing to the services themselves coming. The upside would probably be cheaper services and investment in new roll outs like fiber to the curb but it'll be an ugly tumultuous process getting there with trillions of bucks riding on all of it.
Re:Anyone else sick of (Score:5, Insightful)
When you make a VoIP call it routes the calls online to the proper local server which then dials out in the city that it resides as a local call. MCI did this a while back with microwave towers, that bypassed the long distance lines that Bell lay down between cities nationwide. To solve the problem they "taxed" your local phone bill $4-5 or so each month. So you can see why this is a threat to all of the phone companies, (1) because they are not recieving this tax, (2) they have lay a framework that will soon become absolete.
As a result the big businesses and small local providers that utilize the existing framework are losing alot of money in investments that they once thought they would have control over for times to come. The only way they see revenue coming in is some sort of government regulation.
VoIP is a great technology and I would love to see it developed even further, but we just need to find somewhere in the middle that the phone companies and VoIP technology can both benefit, so we don't destroy our economy.
Technology always takes a back seat to... (Score:2, Insightful)
Re:Reasons I feel voip is not sliced bread (Score:3, Insightful)
"Magic" data packets (Score:1, Insightful)
IP Telephony uses the same infrastructure and packetized protocols as other "data" carried on the internet. The real danger is not just to the emergence of IP telephony, but to the concept that all data is "equal" on the internet. Internet billing, where it exists, is content neutral until now. Imagine if next someone choose to "tax" other kinds of protocols or content selectivily; imagine what would happen to the prn industry if an image transport tax came into existintance
Re:Kapitalizm Rulez (Score:5, Insightful)
You really should file a complaint then. Unless, of course, your "landline" phone is cordless, in which case your phone service was up but you didn't have a phone that ran off the power supplied by the phone grid.
The phone companies are required to keep the phone service running in case of emergencies. They may not be able to handle the call volume (c.f. 9/11), but they have to provide dial tone, at least for some "reasonable" amount of time (CO's generally have sufficient backup power onsite for 72 hours, and they're usually on the same priority level as hospitals when it comes to getting diesel fuel during emergencies).
Where there is broadband Internet, there can be VoIP. As last-mile broadband gets more economical via wireless and optical (along with traditional copper and cable), so will VoIP.
None of which is available to the rural communities the grandparant mentioned. In the case of some rural farms the "last mile" is more like the "last 20 miles". Even microwave transmission has issues at that range unless you put up some pretty honking big towers. WiFi sure as hell isn't going to cut it. Powerline may be an option at some point in the future though, but even then it's questionable that it will be affordable.
I can dial 911 from my Vonage home telephone just fine, thank you very much.
As the AC pointed out, no you can't -- although it doesn't look as drastic as he points out. Some "local public safety answering points" may be 911 call centers. But not always and roaming 911 is a complete no go. Equally importantly, quoting from here [vonage.com]:
That makes it an unviable solution for E911 services.
BTW, Sprint's services were all up during the blackout. Landline, cell, and internet. Most of the cell towers were overloaded in volume and most of their customers (including ones in the same physical building) lost Internet access due to no backup power, but any hosted customers in the NE region remained powered up and doing business. And the landlines worked exactly how they're supposed to.
While I agree that a lot of the regulations and cost structures in the telephone arena are designed specifically to keep competition out, the need for a reliable emergency service and the need to continue to supply rural customers with service are two points that still need to be adhered to. Vonage isn't capable of solving the second issue, but they need to address the first if they're going to bill themselves as a phone company.
Re:Balanced decisions anyone? (Score:3, Insightful)
What? Have you seen this? [vonage.com] Maybe that falls into your definition of "little fuss" but it seems to me that they clearly spell it out.
I can subscribe to MCI's Neighborhood, too. But it's actually *more* expensive than getting local from BellSouth (my local telco) and LD from MCI. Bundling doesn't save anything. And if I use BellSouth's bundle, it's even MORE expensive.
That's great for you, but let's not confuse the issue here. Vonage (et al) should be an option for those willing to accept the risks. I currently understand that if my cable modem (and the cable infrastructure) loses power, I'm not going to be able to make phone calls in an emergency. That's a risk that I'm willing to take in order to save $35/mo, every month. I'm willing, for the time that I have an emergency, to walk over to my neighbor's house and say, "Don, do you mind if I use your phone? Mine's out." If you're not willing to take that risk, ok. I'm not trying to regulate your risk aversion. But I am willing to take such a risk and I don't think that anyone should be enforcing my use of an expensive service that provides features that I don't personally feel I need.
I really respect this particular stance. You're simply not willing to pay for a service that provides a certain set of risks that you think are unacceptable. This is, IMHO, the most sensible response to the VoIP debate I've heard. It doesn't require VoIP providers to be regulated for quality of service, it simply says that you won't be a customer if they don't. This is completely reasonable.What bothers me about this debate are those who want to enforce features on me (and others) who are willing to live without some of those features for a lower price. That to me is no different than me forcing you to use VoIP even though you're willing to pay more for features that you demand.
Re:The problem with big companies (Score:3, Insightful)
Yeah, like patenting everything they can think of, original or not, and then suing everyone who violates their patents. How many of the companies engaging in patent abuse as their sole source of income are startups vs. entrenched companies?
This is not fundamentally a big company vs. little company issue. Yes, it's true that the companies that are trying to legislate their current business model are frequently large, old, entrenched ones, but it's also sometimes the case that startups will try to get laws passed to enable their businesses. Similarly, it's frequently true that the companies trying innovative things are small, but sometimes they're large companies, too. This should be obvious to anyone who reads the article, which mentions that two of the companies arguing in this case are AT&T and Sprint- a pair of old, entrenched companies.
Bad Analogy (Score:2, Insightful)
So Vonage is allowed to consume resources in the existing phone network, like phone numbers and use of the last mile lines to normal phones, yet skirt the fees that keep the system, and Vonage's only source of value, running? I think not.
Re:Outdated modes of communication (Score:2, Insightful)
We regulate the phone company for a reason (Score:5, Insightful)
- The ILEC phone company has to provide POTS to everyone at the same price, they're not allowed to simply bypass a small town where they can't make a profit on concentrate only on the profitable cities.
- 911 always gets to the correct local authorites on a POTS line. Cell phones have had their problems with this, but they're being ordered to make it work now. You don't even need to have paid service to reach 911, any network that hears an emergency call request must handle it. They even have to drop a paying customer to make way for a 911 call if that has to happen. By comparision, VoIP sometimes has no clue what to do when you dial 911...
- POTS is required to have golden uptime standards by law. Yeah, when was the last time you picked up your phone and didn't get a dialtone? The ILEC has to build a super-reliable network, because we're so dependant on it. Afterall, when phone service is out the local police have have to do extra patrols to make up for the fact they've lost the 911 reporting system, that costs taxpayer money when that happens.
So, if you want to create a service that's going to replace POTS, you've got to be as good as POTS. We can't have Vonage come in and tell people it's okay to cancel their POTS lines and use them itstead unless Vonage is willing and able to totally replace all of the public-interest services that ILECs provide.
Let's face it, the ILECs don't provide 911 and their high reliablity standards just to be nice, they do that because we require them to by law. The least we can do to pay these companies back is promise that anybody who competes with them also has to jump through the same hoops...
Re:Kapitalizm Rulez (Score:3, Insightful)
You might have an UPS for your computer, but would you like your local taxes to go up to make sure everyone in your city has one? Oh, wait, not everyone in your city even has a computer yet.......
The point is REVENUE (Score:2, Insightful)
Primary VOIP (Score:3, Insightful)
If a company's primary business is to provide voice/pots type service, then they are going to have to cough up an pay to play.
Sorry, that's just the way it is. Somebody has to pay the freight to maintain the local loop infrastructure/plant.
Primative, unreliable voip through the computer is probably another story altogether.
The other option is to treat all computer connections the same as POTS, and that will kill the internet goose.
Eventually, one way or the other these issues will have to be hashed out, but I can't see that coming soon, not until we establish a unified national plan that ties in Cell, Cable, Satellite, Internet and traditional.
I can see the fighting/mergers that will make that possible, sure.
Vince doesn't have any monopoly on vision, just a big name from a past event.
It all comes down to... (Score:2, Insightful)
Vint Cerf does it again (Score:3, Insightful)
Yes, VoIP is a distinctive service, and regardless of the fact that it's married to packet media, it should be regulated the same as landline or cellular service.
However, that means that the regulations need to be modified to understand that some "carriers" will be individuals running their own connection service from their own houses and various switching services will be operated without the switch operator having any idea whether the traffic is TCP or VoIP.
the solution (Score:3, Insightful)
Tax whoever owns the copper wires (ultimatly you are paying them some kind of line rental fee anyway)
For example, if you have Vonage VoIP over Covad DSL over Verizon lines, you pay Covad for the DSL service. Covad then pays (or mabie you pay directly, I dont know exactly how it works in america since I dont live there) Verizon for the copper wire.
Therefore, you pay Verizon (directly or indirectly) and Verizon pays the tax to the government.
i.e. move away from taxing those who provide phone service and start taxing those who actually carry that phone service.
Re:Anyone else sick of (Score:3, Insightful)
Ah, the tired old "we want to have our cake and eat it too" rant. What you're really trying to say is "in general I think freedom is good, although there are some things people do voluntarily that I don't agree with and want government to address with force. Instead of admitting my hipocrasy, I'll just state that both extremes are evil, and therefore we'll just conclude that the only solution is a mix of freedom and oppression, however necessarily arbitrary it is".
Re:Anyone else sick of (Score:3, Insightful)
There are exactly 2 modes of human interaction possible in this world: voluntary and involuntary. Force includes physical harm or threat of harm, theft, fraud, and in general any involuntary mode of interaction. Everything else is voluntary, and therefore, devoid of force.
This is not in your dictionary because it's not a simple generic definition. It's an objective analysis of exactly what government represents, exactly what everybody else represents, and exactly how the two entities interact.