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Why VoIP Makes Telecom Regulations Irrelevant 341

Posted by simoniker
from the chocolate-cake-over-ip dept.
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.
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Why VoIP Makes Telecom Regulations Irrelevant

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  • by Empiric (675968) * on Monday September 08, 2003 @02:12PM (#6902075) Homepage
    Moreover, according to AT&T, Sprint threatened to disconnect the circuits unless AT&T agreed to move all traffic onto paid-for-access service. When AT&T complained, Sprint resumed service but filed a billing dispute claiming that access fees apply whether the call is delivered over the Net or through copper wires.

    Sprint disputes AT&T's account, saying the dropped calls were a "translation error" due in part to AT&T's desire to hide what it was doing. Either way, Sprint maintains that the calls should be subject to traditional access fees.

    As someone on the other side against AT&T in the 80's over a law called "Avoidance of Toll Charges", I find this incredibly ironic. It seems arguable that AT&T is now a phone phreak.

    Hey, AT&T... can I have my Commodore SX-64 portable back now?
  • Anyone else sick of (Score:5, Interesting)

    by Trigun (685027) <evil@evilem p i r e.ath.cx> on Monday September 08, 2003 @02:13PM (#6902082)
    businesses that try to enact legislation which protects not only their interests, but a business model that is no longer relevant due to advances in science?

    Get with the times, or get out of the way.

    • This is another example of large businesses desiring regulation. Most people think businesses don't want any government intervention in their industry. This is just wrong. The will desire it if it hurts their competition more than it hurts them.

      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
    • by xant (99438) on Monday September 08, 2003 @03:00PM (#6902655) Homepage
      Is that they do this.

      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.
      • Little startups figure out ways to make money off the new technology, because they're not so entrenched.

        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

    • by ratamacue (593855) on Monday September 08, 2003 @03:14PM (#6902811)
      Better yet, anyone else sick of the governments which make it happen?

      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.
    • by AustinTSmith (148316) on Monday September 08, 2003 @03:26PM (#6902944) Homepage
      They are trying to defend their current capital investments in their local framework. VoIP is doing much what the MCI's and Sprints of the a while back did, by bypassing the Bell Atlantic monopoly. VoIP bypasses the very expensive "last-mile" of phone lines to reach each public house hold that are only being utilized by incoming calls (for now).

      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.
  • by mOoZik (698544) on Monday September 08, 2003 @02:13PM (#6902097) Homepage
    This is just another attempt by the biggies of the industry cartel to control communication and control costs. IMO, it will prove unsuccessful, as VOIP relies on the fundamental technology of the web, which cannot be controlled by state or federal governments.

  • Regulation Kills (Score:5, Insightful)

    by Doesn't_Comment_Code (692510) on Monday September 08, 2003 @02:14PM (#6902109)
    We've seen time and time again, the government is not very good at handling technology. They inevitabley screw it up. They overregulate and kill whatever was good to begin with. After a while they'll find a large corportation that they can back via the DMCA to comandere the technology and prosocute the originators for piracy. This has happened before. And it looks like they're planning to do it again.

    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.
    • Kapitalizm Rulez (Score:5, Interesting)

      by Detritus (11846) on Monday September 08, 2003 @02:37PM (#6902415) Homepage
      There is a reason all of those federal and state regulatory commissions were put in place, and it wasn't just to stab entrepreneurs in the back.

      Do you want reliable telephone service? Even if there is a power failure?

      Do you want guaranteed availability of telephone service at uniform and reasonable rates, even if you live on a farm or in a slum?

      Do you want 911 service that works?

      Besides loss of tax revenues and control, there is a good reason for regulatory agencies to be concerned about VOIP. What if VOIP severely damages the market for conventional telephone service? That could result in the loss of universal and reliable, even if somewhat overpriced, telephone service in this country.

      • I like those points.

        But it seems that the need is for reliable communication channels, and that need can be fulfilled as much by reliable internet technology as it can by reliable copper wire technology. I would be inclined to shift those elements of regulation (availibility, reliability) to data carriers, rather than try to reclassify certain types of data as copper wire technology for the sake of regulation.

        The country needs that reliability. But it does not necessarily need it in its current form.

      • So the government should force me to pay for a system that I don't want or need so other people can use it?

        No wonder I hate all of mankind.
      • Re:Kapitalizm Rulez (Score:5, Informative)

        by mikewren420 (264173) on Monday September 08, 2003 @03:12PM (#6902796) Homepage
        Do you want reliable telephone service? Even if there is a power failure?

        During the northeast blackout a month ago, my landline phone went dead also. Meanwhile, if Roadrunner had backup juice on their network, my broadband would not go out even in the event of a blackout (my home server, firewall, Tivo and Vonage ATA can live for 4 hours off the grid).

        Do you want guaranteed availability of telephone service at uniform and reasonable rates, even if you live on a farm or in a slum?

        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.

        Do you want 911 service that works?

        I can dial 911 from my Vonage home telephone just fine, thank you very much.

        If Vonage starts overcharging, I will be happy to switch to another VoIP service, such as packet8.
        • Re:Kapitalizm Rulez (Score:2, Interesting)

          by Anonymous Coward
          "I can dial 911 from my Vonage home telephone just fine, thank you very much.
          "


          Actually, you can't. You might think so, but you should read the disclaimer on Vonage's website. They make a point of noting that they do not connect you to the 911 Emergency dispatcher. What they do, in fact, is use your registered billing address to route your call to the local police department. So instead of getting a trained 911 dispatcher with twelve pots of coffee to stay awake for those late shifts, in the middle of
        • by Zathrus (232140) on Monday September 08, 2003 @03:58PM (#6903278) Homepage
          During the northeast blackout a month ago, my landline phone went dead also

          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]:
          911 Dialing and Vonage Service DO NOT function during an electrical power or broadband provider outage.

          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.
        • by LostCluster (625375)
          Most cable TV / Broadband networks are powered by the local grid, with only about one hour worth of backup power on board. Besides, the cable network is no good for VoIP in a blackout without an UPS, POTS supplies enough power for a simple analog phone to work as part of the standard.

          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.......
      • First, what makes you think government can magically wave the wand of force and turn the product of voluntary association into something better?

        Second, although you claim to have reliable telephone service and reasonable rates, my experience with Bell South is exactly the opposite.
      • Re:Kapitalizm Rulez (Score:5, Interesting)

        by swb (14022) on Monday September 08, 2003 @03:47PM (#6903161)
        I agree that these services need regulation, but not for the reasons you specify, but because they are natural monopolies that must not be allowed to flex their monopoly power. Regulation allows for their corporate business decisions to better reflect needs, and not just where the best buck is. Finding the best buck is OK in my book as well, but you aren't allowed to use a monopoly to do it.

        Do you want guaranteed availability of telephone service at uniform and reasonable rates, even if you live on a farm or in a slum?

        Actually no. Smart regulation reflects the varying costs of delivering a service to those getting it. Needing a lot of expensive infrastructure built to service a small number of people or very high fraud costs *should* increase purchase costs. Cross-subsidizing them to make a phone $25/month, everywhere, is idiotic. I'd have a T1 to my office (urban areas, lots of facilities), but its $500. Not because it costs $500 to deliver it, but because many of those costs help subsidize other more expensive POTS deliveries elsewhere.

        The semi-scary VOIP thing is that instead of smartly regulating it like we should, we'll instead just slap the old regulations onto VOIP.
    • Re:Regulation Kills (Score:3, Interesting)

      by Spy Hunter (317220)
      Yeah, regulation did such a great job of destroying the phone industry. That's why the phone service in the US is in such shambles right now, right?

      Give me a break. Regulation did all right with the phone companies for a long time. The phone service here (in the US) is excellent and reasonably priced. It may not be extremely innovative, but that's not why we regulate things. We regulate things we want to be dependable and universal. That's why we should do for broadband what we did for phones. Broa

    • If I had a copper line, how many times do I pay taxes for this wonderful privelage?

      1) Income Tax
      2) SSI Tax
      3) State Tax (some states)
      4) Insurance Deduction (taxed through the Insurance Provider, cost passed on to me)
      5) Universal Service Fee
      6) Line Access Surcharge (taxed and passed on)
      7) Federal Tax
      8) Long Distance Access Charge (also taxed and passed on)
      9) ???
      10) MASSIVE PROFIT!!!

      Seems rather excessive that I am taxed at least three times on every dollar I make and spend!

      Just my $.02 (after taxes from $1
  • by brundlefly (189430) on Monday September 08, 2003 @02:14PM (#6902112)

    ...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.)

    • by Trepidity (597) <<gro.hsikcah> <ta> <todhsals-muiriled>> on Monday September 08, 2003 @02:19PM (#6902167)
      If data should be taxed, then do that -- tax by the megabyte or whatever. But there's no particularly good reason that some data should be taxed more than other data. Downloading slashdot's mainpage travels over the same infrastructure as making a VoIP call, so why should the latter be subject to special taxes?
      • by stratjakt (596332) on Monday September 08, 2003 @02:42PM (#6902470) Journal
        Taxes are supposed to pay for government services though. Taxing my analog phone pays for 911, for instance. Taxing my property pays for police and roads and sewer, etc. Sin taxes on alcohol or gasoline pay for the governments steps to repair the damage those products do (supposedly). Food isnt taxable, because the government isnt feeding me. Taxing my internet usage pays for - what? When the government starts slapping down infrastructure and pushing broadband out to everyone, then they can tax it.

        I know the principle of taxation has spread to the point that every time money changes hands, the government gets some of it, but it's wrong.
      • Downloading slashdot's mainpage travels over the same infrastructure as making a VoIP call, so why should the latter be subject to special taxes?

        Because this isn't quite true. Most backbones run ATM or some other protocol that provides real QoS. Internet connections have always been "best effort", whereas voice was given the highest priority.

        Slashdot can handle a 5 second delay in delivering packets -- your phone can't.

        In short, while bits are bits, the method of delivery is different and needs to be
        • Slashdot can handle a 5 second delay in delivering packets -- your phone can't. In short, while bits are bits, the method of delivery is different and needs to be paid for that way.

          It seems to me that there's a fundamental difference of opinion in the purpose of taxation. Some people think that taxation is designed to keep government running, so government should continue to seek out new sources of revenue as old ones dry up.

          Other people seem to feel that the purpose of taxation is to ensure that
          • What value does the government bring to VoIP? If you can't point to any value that the government brings to this technology, then (it seems to me) that you have to admit that they're just trying to recover lost revenue.

            The Universal Service Fee was put into place to ensure that rural areas received phone services without it costing users thousands of dollars for an install. The gov't saw the benefits, mostly economic, of having telephone service in more than just metro areas.

            Why do rural areas have tele
      • From my reading of the article, the real issue comes from the charges between carriers for terminating calls. I didn't see anything that would stop you from setting up 2 net phones and talking to your buddy somewhere. It seems to me the problems arise when I have VoIP & I'm calling a regular land line. Sprint was saying that At&T was trying to not pay them for terminating those calls. I can see the point, really; Sprint doesn't care how the calls got to them, if they have to terminate them they want
      • > there's no particularly good reason that some data
        > should be taxed more than other data

        I don't see how this follows. Different types of mail are charged at different rates. Vehicles can be taxed at different rates (for registration or tolls). It's not the item itself that is being taxed as much as the item and the intended purpose.

        So a given RTP stream being used for video streaming can be taxed differently than an RTP stream for a phone call. In fact, VoIP allows for this better than traditional
    • So, tax internet access. Their analogy is wrong. Just because "horseless carriage" is anachronistic doesn't mean we shouldn't regulate cars, for example.

      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.
      • I'm not sure why it needs to be taxed at all. Taxes were already paid on the money when it was earned (presumably) and sales tax is paid on the service where applicable.

        Why the need to tax it above and beyond anything else just because it's communication? I understand gas tax, as that pays for roads.. But isn't the telecom infratructure mostly privately owned?
        • I agree. I don't see why telephones need to be taxed especially.

          Right now, telephone access taxes pay for subsidies to give poor people lower rates on telephone service. A friend of mine pays $10/mo for her phone service. And she really is poor.

          However, that's not the only thing that telephone taxes go towards, but it's the only thing that telephone companies' PR folks rush to tell you about. So I imagine that much of the taxes go back to the big boys of the telecommunications industry, and it's just ther
    • It's not free. You still have to pay for your internet connection, and it sounds like it has to be broadband, which is pricey.

      If we communicated by way of dictating to people who tapped out messages in Morse Code... well that's a ton of overhead. It would be expensive. It would also be replaced by better and more convenient technology. As a matter of act, it already has! Meet the telephone!

      My father is a typesetter, or was. Don't know what one is? Not surprising if you don't, because the job more o
    • The difference is that VoIP is transmitted just like all other internet traffic. They would effectively be charging people for using their section of the internet, which would be a disaster for the freedom and openess which has defined the internet.

      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 inf

      • The difference is that VoIP is transmitted just like all other internet traffic. They would effectively be charging people for using their section of the internet, which would be a disaster for the freedom and openess which has defined the internet.

        Differential taxation based on use of a single infrastructure is nothing new. Semi-truck drivers pay road taxes that automobile drivers don't, for instance.

        -Isaac

        • A semi spends a lot more time on the road than your typical automobile, and causes a _lot_ more wear-and-tear on roads due to its increased weight. This "differential taxation" is merely an attempt to tax by actual usage of the resource, not an attempt to make semi drivers pay more money just because they're semi drivers. With Internet service it is possible to measure usage exactly (number of bytes transferred), and so we can tax by that instead of having different taxes on different users.
    • The problem is, where do you draw the line today? When phone calls went over the phone lines, that was easy. No it isn't.

      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
    • The difference is only in the underlying technology.
      If I purchase leased lines from one location to another, should I not be able to use that? Should I not be able to route traffic through the most econimical means available to me?

      Now, if my friend at another company says that I can route over his network as well, should a company have the right to say that we cannot do this because I will no longer be paying for high cost leased lines, and now working off a friends network? And if another friend hooks i
    • your isp costs are tax free?

      and so is your electricity?

      you don't pay taxes when you use a commercial voip service?

      sounds like a nice place... it's all taxed anyways though, just under different titles. the telecoms should just come up with something better to sell than just traditional phoning, and around here they have(gsm, *dsl), or adjust the prices according to how much cheaper it has become to upheld such a system during the last 15+ years(heck, most very long distance calls are more or less vo-some
    • > VoIP lets people talk at a great distance and travels over telco lines. And does not get taxed.

      I beg to differ. I most certainly DO pay taxes on my DSL line (including the universal service fee). And since my DSL service comes from Speakeasy (via Covad) and my main line comes from Verizon, I'm paying these taxes twice for the same piece of wire.
    • I'm not sure I understand why VoIP is so different from traditional phone calls.

      It's a question of costs, degree and scale. The cost of bandwidth is dropping exponentially anyway, and going from conventional telephony to VOIP drops the costs by atleast a factor of 4 (due to compression) further. Essentially, telephony traffic is rapidly becoming not worth taxing.

      What is the difference? A matter of what the encoder/decoders look like?

      Largely. The point with VOIP is that you can install good compression

    • VoIP lets people talk at a great distance and travels over telco lines. And does not get taxed.

      Well, mostly. But that is not what the real fight is about. You can use any number of internet voice communication tools to transmit voice communication across the internet. (BattleCom, AIM Talk, ...). It's not just "voice" that is at issue.

      These VOIP carriers do more than just carry data. They also interface with the currenty telephone system. AIM has an address range of all AOL member names and AIM names. The

  • by L. VeGas (580015) on Monday September 08, 2003 @02:16PM (#6902129) Homepage Journal
    the phrase Internet telephony will sound as archaic as 'horseless carriage' sounds today.

    Well, we used to call it just "net phony", but people kept confusing it with dating services.
    • the phrase Internet telephony will sound as archaic as 'horseless carriage' sounds today.

      Well, we used to call it just "net phony", but people kept confusing it with dating services.

      We should probably think up a totally different name for it. Internet telephony has telephone in it, so every city councilman in the land thinks you should pay him money to use it. Just start calling it voip, pronounced as a monosyllabic word, as in "I'll voip you later" instead of "I'll phone you later." That

  • 10-10-$NUM (Score:5, Interesting)

    by grub (11606) <slashdot@grub.net> on Monday September 08, 2003 @02:17PM (#6902147) Homepage Journal

    As I understand it all those "10-10-$NUM" services you see advertised on the television all use VoIP. My 5 cent (CA$) long distance (to .CA and .US) I get on my cell is VoIP. It's just 'old skool' wanting to protect their virtual monopoly.
    • Re:10-10-$NUM (Score:3, Insightful)

      by devaudio (596215)
      naw 10-10 isn't all voip, it just designates to the Call Agent what long distance provider you want to use other that the default (that you selected). You can even use it to use AT&T or Verizon if you wanted
      • Re:10-10-$NUM (Score:3, Interesting)

        by RollingThunder (88952)
        Yes, but what he's saying is that it's the VoIP that makes such a business model feasible. That way, they can buy much cheaper bulk IP data, and shunt it all over the country, connecting the ends with local calls, and still cost less.

        Naturally, the actual telcos don't like losing their highest profit percentage traffic, even if the other guys are doing it by the exact method they are.
  • by gristlebud (638970) on Monday September 08, 2003 @02:18PM (#6902153)
    The article focuses on why WOIP should not be held to conventional telephone's regulations because the technology involved is vastly different. However, to the end user, they just (or least should be able to) pick up the phone and dial a number. If VOIP is providing a functionally equivalent service, then they should be held to the same standards as conventional phone services. (Note: This is why Paypal gets to screw their customers regularly, since they are not regulated as a bank)

    If Vonage et. all. succeed, it should be on the basis of providing a better product for less money, not by finding and exploiting loopholes in the regulations that are desinged to protect consumers.

    • If a service:

      Provides you with a PSTN phone number and
      Allows you to call the PSTN and
      Allows anyone on the PSTN to call you

      then it is de facto a telephone service.

      If you really want to spur the growth of VoIP, just deregulate all CLECs.
    • by kfg (145172) on Monday September 08, 2003 @03:21PM (#6902886)
      ". . . functionally equivalent service, then they should be held to the same standards as conventional phone services."

      So in your opinion I actually do owe someone a stamp for every email I send?

      Why? I've already payed for the bandwidth.

      You see, the particular infrastructure for delivering "content" is very, very relevant to how it is payed for. It is the infrastructure that is taxed, not the "service."

      Traditional telephony has an infrastructure tightly controled by the few. With the internet the infrastructure, and cost/ownership thereof, is distributed amongst the users themselves.

      I actually just terminated my phone service because I got tired of paying more in taxes than I was for the actual service. You want to talk to me? Fine. Email me. IM me. Meet me in my private IRC channel. Roger Wilco me.

      I don't use the phone system at all now. A packet is a packet and I already pay relevant taxes and fees for my cable internet use. It's nobody's business what my packets decode into.

      Telephony is dead. It just won't stop breathing.

      KFG
    • If VOIP is providing a functionally equivalent service, then they should be held to the same standards as conventional phone services.

      First of all, define "functionally equvalent".

      (Theoretically) VOIP isn't as reliable as regular telephone service - does that mean that it's "functionally equivalent"?

      Second, you miss the reason it's regulated as heavily as it is - because in the past, each telco was a monopoly, and they had to be regulated in order to prevent them from screwing their customers (which hap
  • by Not_Wiggins (686627) on Monday September 08, 2003 @02:21PM (#6902190) Journal
    The telephone companies had ISDN a *long* time ago and tried to rip-n-gouge money out of their subscribers; hence, the modem was invented as a way to circumvent that ludicrous system.

    Of course, the phone companies tried to get modems banned. Or, at the very least, get legislation to charge separate access fees for those users because they knew nobody would pay such high prices for ISDN when they could make local calls ($.05, untimed in my area) and get reasonable (although slower) speed.

    Now they're in the same boat. With the advent of technology that allows similar operation as the phone, but over the internet, they're scrambling to find ways to bring it under *their* control. I'm assuming that at this point, you don't need to be told why.

    I'd expect this to go the same way I expect the Hydrogen Fuel Cell car to go in America with "Big Oil" resisting it... slow the adoption of the technology until a very large interest in it can be secured by the large corporations affected.

    And *we*, the people, allow it to happen... write your congress person and tell them "hell no!"
    • You've got your history wrong. Modems existed long before ISDN.

      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.
  • by maggard (5579) <michael@michaelmaggard.com> on Monday September 08, 2003 @02:22PM (#6902204) Homepage Journal
    Small wonder MCI plans to shift 25% of its voice traffic to the Internet backbone by the end of 2003. By 2005, 100% of MCI's traffic will be carried over the Net, instead of traditional copper lines.
    Uh, No.

    Neither MCI or any other carrier is routing their calls via "the Internet". They're carrying them on internal networks over TCP/IP. That they share a common set of protocol and hardware infrastructure doesn't make them "Internet".

    Indeed the closest this sort of inane statement could get to being correct is that some carriers might be routing some of their telephony and traditional data services over the same connections using the same hardware; hardly news and not at all what the article implies.

    • You know, I was thinking that, myself (that the article is very vague.) I want to know what exactly is going on here. Do you (or does anyone else) know WTF the actual problem is?

      The "termination fee" the article mentions is apparently what "local line owner" charges another company to connect a call. e.g. if Sprint owns the physical copper wire to your house/business, then Sprint gets to charge AT&T for the privilege of connecting an AT&T user to you. This seems reasonable to me.

      However, given th
      • First off phone companies are highly regulated businesses. They're monopolies providing a vital public service. They're required to support all sorts of law enforcement, privacy, emergency, and low cost services.

        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 VO

    • Neither MCI or any other carrier is routing their calls via "the Internet".

      Some of them are. I was at a presentation at Spring VON (Voice On the Net) conference where an international telephony company described exactly how they do indeed use the public Internet for routing their VoIP traffic.

      Of course, this is not to say that MCI is doing this. But it certainly isn't true that no one is doing it.

      And on a complete tangent, it is rather ironic that this story was posted while I was (and still am)

  • DSL / Combo packages (Score:5, Interesting)

    by CeladonBlue (187054) on Monday September 08, 2003 @02:23PM (#6902218)
    Actually Verizon is already trying to head off competition from VOIP services by offering a "Freedom" package (I don't know what the other Baby Bells are doing) which includes DSL, unlimited local and long distance for a set price (wireless as well.) I expect that this is to stop encroachment of VOIP into the lower end of the market (residential / small business.)
    • I'm not sure which side of the point you're on, but I see this as a good thing. I'm not so much pro-VOIP as I am pro-cheap-calling-to-and-from-anywhere-in-the-wor l d. When I can carry my cell phone to any point on the planet and call any other person on the planet at any time of day for no extra charge above my standard flat rate of $20/mo, telecommunication will finally be where we want it to be. If VOIP gets us there fine, if not that's fine too. And until then I'll be happy enough as long as the competi
  • by gothicpoet (694573) on Monday September 08, 2003 @02:24PM (#6902235) Homepage Journal
    As a user of Vonage in Minnesota this concerns (and annoys!) me.

    One of the reasons I got the VOIP service was the fact that I'm sick of being scr*w*d with by local phone companies. It's also cheaper, and the sound quality is better. (And hey - I'm a geek.)

    I just recently moved. I had a cable modem installed in my new house before I cut off my broadband service at my old house. I unplugged the little Cisco box that my Vonage phone service runs out of and took it to my new house and plugged it in. I ran the phone cable that comes out of it into the nearest wall jack... et voila! My home phone service for my entire house just moved from one house to the next in 20 minutes with no hassles.

    The last time I moved I was using Qwest. Instead of transferring my phone number from one home to the next in adjoining towns in the Minneapolis suburbs, they transferred my phone number to a town in Iowa and told me that there was no way that they could move it back in less than three days.

    Anything that threatens to impede the growth of regular phone alternatives must be stopped. The traditional phone companies deserve to die a slow death if they can't get their heads around the idea of "customer service" instead of "self serving."

  • Emergency Services (Score:3, Interesting)

    by ibpooks (127372) on Monday September 08, 2003 @02:24PM (#6902238) Homepage
    Phone taxes pay for emergency services such as police, fire, and ambulatory response systems and the 911 emergency call service. I think it's perfectly fine for VoIP users to pay those taxes as well, because everyone relies on emergency services.
  • by bildstorm (129924) <peter,buchy&shh,fi> on Monday September 08, 2003 @02:26PM (#6902266) Homepage Journal

    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.

    • But unfortunately, Vonage makes little fuss about the fact that if your broadband provider goes down you're screwed. How about those 911 calls?

      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.

      For very close to the same prices, I can get MCI's The Neighborhood plan with DSL here.

      I can subscribe to MCI's Neighborhood, too. But it's actually *more* expensive than getting local from BellSouth (my local telco) and L

  • by waxmop (195319) <waxmop@WELTYover ... net minus author> on Monday September 08, 2003 @02:26PM (#6902270)

    The US economy is fat-packed with industries kept above water through government protection and subsidies. The telecom industry is not going to give away their revenue stream without a fight.

  • by Anonymous Coward on Monday September 08, 2003 @02:27PM (#6902279)

    The one reason that the government wants to treat VOIP as a telecom service is wiretapping.

    CALEA [askcalea.net] requires access to telecom services, for just that purpose.

    • And the telecoms want money. If the government and industry have a common interest in screwing over consumers/citizens, then they will do it.

      The stupid thing is that VOIP is essentially nothing but another addressing system for "voice chats". I can use iChat or AIM with sound, and it's just like VOIP except that the addressing is done by AOL instead of a telecom. In the end, they'll have regulations set up on technologies that the criminals they want to catch can get around easy.
  • by isaac (2852) on Monday September 08, 2003 @02:28PM (#6902296)
    There's no doubt that the driving force behind state regulation of "internet telephony" is the collection of access fees. That said, those advocating no regulation of companies selling phone service that bills itself as a replacement for landlines are unrealistic.

    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

    • by Spy Hunter (317220) on Monday September 08, 2003 @02:54PM (#6902599) Journal
      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.

      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.

      • 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.

        That's not a bad point. However the laws won't be revised, or at least they won't be revised in any way that improves the

    • Did everyone sleep through the blackout of 3 weeks ago? VOIP didn't work. Cel phones didn't work.

      Memphis, TN was hit with a really bad storm about 3 weeks before the northeast outage. We (Memphis) lost power to 70% of the city and phone service in about half. Power was out at my house for 4 days and everyone that I know at one time or another had their power and/or phone go out intermittantly for about 2 weeks after the storm.

      All the while, my wireless phone (verizon) never lost service. I did hear plent
    • 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.

      Try reading this as:

      Personally, I can't stand Post Offices and in fact don't have a mail box myself, but the dogma that mail shouldn't be subject to regulatory requirements if it uses the internet doesn't sit well with me.

      Do you want to pay taxes on your email? Slashdot views?

      There's nothing about VOIP
    • 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.

      I think you're underestimating the consumer. I personally have decided *NOT* to choose VOIP over Verizon's $50/Umlimited plan, because I personally value the reliability of the copper network.

      Many people, including my brother, feel othe
  • by sbma44 (694130) on Monday September 08, 2003 @02:30PM (#6902321)
    its standard-bearer seems to be Vonage, and some of the cable companies. In my area, at least, Vonage costs $30/mo and has limitations that traditional service doesn't: most notably iffy 911 service, and the fact that it'll go out whenever the broadband connection does -- which is far more frequent an occurrence than a loss of "analog" phone service.

    Traditional phone service costs me $20/mo for unlimited local calls -- and I can get a line for as low as $13/mo with restrictions on outgoing calls. So the VoIP product is more expensive and less reliable -- features are great, but for myself and many others, reliability and price are probably the two biggest considerations when choosing a phone service.

    And this is before states impose phone taxes (yeah I know, it makes no sense from a geek standpoint -- but the fact is phone taxes as currently written don't make any sense anyway, and it's a revenue stream that legislators are going to ensure remains available). The only way I can see this business model making sense is if Vonage is going after the bad-credit crowd -- folks who've already had their phone service shut off and are willing to spend more money on a company in exchange for the benefit of the doubt. There are other companies that do this, too. Maybe you can make money charging high rates to a clientele that's likely to default on their obligations; I don't know. But it doesn't seem like the way to popularize the technology.

  • Reliability Issue (Score:4, Insightful)

    by Esion Modnar (632431) on Monday September 08, 2003 @02:32PM (#6902359)
    Now, this assumes that I do not have a cellphone, since otherwise why pay for VoIP if your cellphone works fine?

    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.

  • VoIP is a godsend (Score:4, Interesting)

    by mantera (685223) on Monday September 08, 2003 @02:34PM (#6902377)
    last summer when i was in Kuwait i called my girlfriend in GA using ordinary telecom initially and then using VoIP. The telecom service was almost 2 dollars per minute, so the call was brief and not much was said, whereas the VoIP i finally managed to get was 1.7 cents per minute using vocaltech, yes! one point seven cents from kuwait to georgia USA, and was just great; i talked to my girlfriend, whom i'd not seen or had a good convo with for over a month or more, with VoIP for over 3 hours first time i used it, and it was a heavenly feeling, omg it felt like being able to breath again, i had just missed home so much, my girl and my baby, that i just got tearful and then as the hours passed with me lying on my back in the dark wearing a headset i just felt sorta happy. That, i think, is what makes a technology, any technology, so wonderful.
  • by ascii (70907)
    ... whenever I see Vint Cerf mentioned on /. I get the urge to post pictures I have of him posing along with friends in these really cool thriftstore StarTrek shirts.

    Apart from being a really cool geek he is also a really cool geek to me.

    Sorry for the interruption, mod me down now please.
  • by headbulb (534102) on Monday September 08, 2003 @02:51PM (#6902577)
    Voip in my view is a bad hack to make things cheaper. Here are some reasons I don't like voip and feel it should not be used for telco backbones. (I also have a list of good things)

    1. With the recent worm activity, it just showed how much The net is vurnable to attack. I don't know about you But I want to be able to call people when my net connection is down.
    2. Voip is traveling over a unsecure network. Meaning that the voip gateways can be spoofed, dos'ed, hacked, etc.
    3. Voip is better equiped for use in private networks (meaning your home or small bussiness)
    4. Bandwidth isn't set aside for voip session. Blurp's being hungup by a 'dos happy 13 year' (yah yah sure we will have ipv6 but its still on a unsecure network.)
    Reasons why voip is cool.
    1. Its not set on a single route.
    2. Its fun to play with for a quick chat with a friend over the internet.

    All and all voip is pretty cool But I don't want to see it intergrated into the public phone system. If the phone company's want to implement a decentrillised system then they need to colaborate together. To make a system which isn't prone to attacks.. what it comes down to is what QOS (quailtiy of service) that a new system can provide.. voip isn't going to provide a high enough qos for me. (there are reasons why the phone system has huge battery banks.)
    • Umm. Voip doesn't have to travel over the internet. Almost all the big voip carriers carry their traffic over their own fiber lines. Putting voice traffic on the internet is not carrier grade solution, since voip traffic is really finiky about latency. VOIP is voice over IP not voice over internet.
  • by Machina70 (700076) on Monday September 08, 2003 @03:04PM (#6902704)
    And yes, the Vonage customer's end is VOIP and independent of the existing phone line system(this is only true for cable, if the broadband is DSL then it's part of the phone system).

    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.

  • Economics and Politics. the fact is that the government has a duty to address the potential economic impacts that VoIP has on the telecommunications industry. Vonage et. al. have an economic advantage over ILECs because they are providing competing voice services with out paying the same taxes. The same advantage I might add that cable providers enjoy. In the grand scheme of things VoIP is a very small element of telecommunications in terms of widespread end user adoption but is is large part of enterpr
  • by LostCluster (625375) on Monday September 08, 2003 @04:41PM (#6903716)
    It seems like people are forgetting why telecom regulation exists.

    - 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...
  • Primary VOIP (Score:3, Insightful)

    by oldstrat (87076) on Monday September 08, 2003 @04:55PM (#6903857) Journal

    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.
  • by blair1q (305137) on Monday September 08, 2003 @05:49PM (#6904434) Journal
    I hate to say it, but Vint never really did understand the Internet.

    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.
    • I think the key difference here is that a VoIP-to-VoIP link is very different from a VoIP-to-Phone link. When somebody like Vonage starts selling a VoIP link that connects to the phone network, they're really selling POTS-over-VoIP. They're just using a substitute last-mile connection technology, and saying it's cheaper because they're cutting out all of the regulatory mess such as E911 that the POTS providers have to deal with. But, POTS by any other connection technology is still POTS, so they deserve to
  • by Fnkmaster (89084) on Monday September 08, 2003 @06:17PM (#6904693)
    If everybody used VoIP, our phone service would generally be as reliable as our internet service. If you think this is a good thing, raise your hand... Anyway, I'm all for VoIP, but right now, consumer/home grade VoIP just ain't comparable to POTS service for plain old fashioned reliability. I also don't think it should be taxed, for a variety of reasons, but let's be real folks - the broadband ISPs aren't going to sit on their thumbs and let people soak up bandwidth with VoIP devices and not get their cut of it.


    For a small business, or as a second line, something like Vonage is great. This needs to be fostered, not taxed, for the time being. Right now, I wouldn't be willing to pay a tax on Vonage because I don't get plain old telephone-style reliability guarantees - that's what you trade off for the bargain. Of course, the real problem is the reliability of the internet infrastructure and last mile broadband connections, which generally are just terrible (especially with DSL, which I finally just dumped in favor of cable). You just can't get reliable service over an unreliable medium.


    I'm willing to pay all these taxes, if and only if I get real reliability and uptime guarantees (for less than 200 dollars a month, which is what these fucking thieves want to charge you for business DSL service).

  • They're All Wrong (Score:3, Interesting)

    by Bruha (412869) on Monday September 08, 2003 @07:17PM (#6905201) Homepage Journal
    Packet switching in the next few years will begin to phase out 5ESS Switching which is the major standard today along with DMS 1000 by Nortel and other Motorola landline switches. With the full adoption of IPv6 your telephone # will be mapped to your phone's IP adddress to allow voice over packet data which is similar to VoIP.
  • the solution (Score:3, Insightful)

    by jonwil (467024) on Monday September 08, 2003 @07:43PM (#6905386)
    Dont tax the phone company, broadband provider or VOIP co.
    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.

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