Telecoms and VoIP: A Warning Against Naivety

March 6, 2005

Three issues�surfaced in the past�week or so�in the world of VoIP that helped me appreciate that, in the world of business, you should never assume that companies will act in the interest sof the consumer and the public, when lots of money is at stake. Surprise, surprise!

The�three issues, as covered on TMCnet�recently are:

1. Efforts by ICE, the Costa Rican government-owned phone company, to have VoIP regulated and even banned if possible. See David Sims's article, "Is VoIP Illegal in Latin America?"

2. The FCC ruling and fine against Madison River for blocking Vonage VoIP phone calls carried over its system. See our buzz page on this topic: "FCC Rules Against Vonage VoIP Call Blocking by ISP Madison River."

3. The introduction of a bill in Texas aimed at outlawing municipal WiFi projects. See Tom Keating's blog entry, "Telecom Bill would Ban Free WiFi." Tom�posits that the telecom outfits that are backing this kind of legislation are not really afraid of free data access over WiFi -- they're really afraid of free VoIP.

I also have to wonder, as does Rich Tehrani, whether Skype founder Niklas Zennstrom�was�naive�when interviewed by�Rich recently (Skype Interview: 23 Million Users Driving Broadband Proliferation):

RT: Do you have any fear that broadband providers will limit the quality of Skype traffic or the ability to transmit on their networks at all?

NZ: No. Skype is driving broadband proliferation and use worldwide, which helps broadband providers' businesses.

Ultimately, it is probably to the advantage of service providers and telecommunications carriers to support the development and use of VoIP technology, but often the concern of companies is short-term profitability and market share.

So it no doubt�behooves the innovators in�the VoIP�industry to be a little paranoid (or what the heck -- just go ahead and be very paranoid!) and seek protection wherever�they can find it (e.g., at the feet of the FCC if you're fortunate enough to be doing business in the U.S.)

AB -- 3/6/05

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