VoIP Inc. Interview

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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VoIP Inc. Interview

VoIP Inc. is a conglomerate in VoIP. They are in retail, wholesale, wireless and business communications systems. If you really want insight into the future of VoIP, you would do well to get these insights from the CEO of such a company. I recently had a chance to conduct an interview with Steven Ivester the CEO of VoIP, Inc.

What do you see happening with the FCC and VoIP in the next 12 months?

Well, that's a good question given the news of the last few weeks. With Chairman Powell's resignation, we're waiting to see who will fill the position, and if they will be as forward-thinking with their rulings. I hope that the FCC will continue with their fairly hands-off approach, which makes the most sense. This industry is still gathering momentum, and any regulatory overtures now would confuse the market, so I hope they remain consistent with their previous track.

What do you see happening with state appeals such as California to regulate VoIP?

I would see those as being struck down. It is by nature impossible to determine where a user is in reference to voice over IP, so state-based taxation is a fairly meaningless gesture. If states try to tie phone numbers or company HQ locations to taxation, then companies will migrate quickly to states that are more friendly, or will at least move their services to those states. It's clear that VoIP is by it's design something that falls into interstate (Federal) communications rules: it has no physical components, it is completely portable, it layers on top of another network (the Internet.)

Do you think VoIP should be regulated? How? Why?

VoIP will require regulation when it is expected to deliver the same services as standard telephony. When I say "require", I mean through burden of law, and not through voluntary subscription to industry standards. There will be devices or services that will never be mistaken for standard telephony, and it is unreasonable that even though they may use VoIP protocols that they should fall into the same law set as household "lifeline" phones. The prototypical example is the question of: "Should I have federal regulations on using my video game console if I talk to other game players on it?" Clearly, the answer to this is "No" but the definition of what is "telephony" and what is not is key here.

Aren't many p2p VoIP providers impossible to regulate?

Yes, it is impossible from a technical perspective. There are administrative methods to regulate technology though. We could move to a system like China has where we have paid censors and spies who inform on their fellow citizens for using unauthorized communications methods. Somehow, I don't see the citizens of the United States being so thrilled about that concept.

What about taxation of VoIP and the USF. Will all VoIP providers have to pay these soon?

USF is a difficult proposition. As a nation, we've decided that all households should have "telephone service" at a reasonable rate. The FCC has notably excluded packet-based services (aka: the Internet) from being eligible for subsidy. So, we're left with an obvious gap now that telephone-like services are being delivered over physical wires (or frequencies) that were not traditionally used for telephony services. What, exactly, is it that these USF subsidies should cover? And who, exactly, should be paying the taxes? Our opinion is that the public good is best served by delivery of the wires or frequencies to the household, and that some mechanism should be subsidized to deliver "data" to the end user. If that is in the form of a phone, that's fine - but it also could be in the form of a computer. We have left the rural and poor populations of the nation out of the Internet. Re-design of the USF model is required to both solve this inequity, as well as remove the USF fees from the services delivered over the wire.

If USF were applied to VoIP, it would be clear to show that this would make no sense by imagining how USF fees would be charged to companies which were based overseas. Good luck getting a VoIP provider in France to pay you USF fees. Good luck in keeping the VoIP companies currently based in the US from migrating offshore to avoid the huge taxes (and they would be huge - costs for calling are dropping to unheard-of levels; the USF tax may be one of the largest single parts of the bill.) The only thing that can easily be taxed is the physical method by which bits enter the residence. This method is the "natural monopoly" and is what requires the tax burden, not the patterns of
data that flow over the media.

If you want to hear more from Steven Ivester, please read his commentary Pitfalls in Government Controls Over VoIP or arrange to meet him at Internet Telephony Conference & Expo in Miami in February.

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