RBOCs are Spending Money

Find Out Where

By Joshua E. Barbach

Despite deregulatory efforts aimed at improving conditions for competition in telecom, deep pocketed RBOCs continue to have the greatest influence over activities in Washington, DC. Because RBOCs have refused to comply with most aspects of de-regulation, and have instead worked to change regulation to favor their own ends, the United States continues to lag further and further behind nations in Europe and Asia in communications services and market advancement. RBOCs have had positive results, from their perspective, for their efforts and political contributions, as evidenced by regulatory changes such as the expiration of regulated wholesale rates and new proposals that threaten to burden VoIP services with access charges and other state-determined fees.

Contradictory VoIP Bill in Senate Raises Concerns
Just when it seemed safe to be optimistic regarding the future of VoIP regulation, several amendments to Senator John Sununu’s (R-NH) proposed VoIP bill – known as the Regulatory Freedom Act of 2004 - were announced. Senator Byron Dorgan (D-ND) convinced the Senate Commerce Committee to pass an amendment that would give states a role in regulating new VOIP services. Dorgan's amendment would allow states to continue to require VoIP providers to contribute to state universal service fund (USF) programs, which help subsidize phone service in rural areas. It would also allow states to require VoIP providers to pay intrastate "access charges," which telephone service providers typically pay to each other for terminating calls on each others' networks.

"[The migration] from traditional phone services will have a dramatic impact on access fees that support smaller, regional telephone companies," Dorgan said in support of his amendment. This statement overlooks the fact that regulation is supposed to encourage technology development and lower costs for consumers, rather than to protect revenue streams for aging telcos whose network build-out costs have long since been recovered.

The second amendment to the Regulatory Freedom Act of 2004, from Senator Conrad Burns (R-MT), permits states to require VoIP firms to "pay appropriate compensation" for 911 services. VoIP lobbyists claim that such fees are already being paid directly or indirectly to incumbents. A white paper released last month by the VON (Voice on the Net) Coalition, which includes Net2Phone, Pulver.com, Microsoft and Intel, says "phone companies are already fully compensated for their costs when Internet phone calls are terminated on their networks" and that universal service charges are also covered.

The vote in the Senate Commerce Committee was close, passing the amendments by a narrow margin, 12-10. Sununu and Senator Ted Stevens (R-AK) did not refrain from expressing their displeasure. "The intention of the (original) bill is to prevent 50 states from regulating (VoIP), and this [amendment] gives back to the states the power to regulate as they choose," Sununu said. "This is not a local copper circuit-switched system. We need to get away from that thinking, and this certainly takes us 180 degrees in the opposite direction." Further, the Burns amendment, regarding E911 obligations, would impose more stringent rules on VoIP providers than those imposed on telephone companies, according to Senator Stevens, who is the incoming chair of the Senate Commerce Committee. The bill and its amendments remain on the Senate floor and are not likely to be voted upon until after the November elections.

Next »   |   1   |   2   |   3   |   Subscribe

© 2004, All information contained herein is the sole property of Pipeline Publishing, LLC. Pipeline Publishing LLC reserves all rights and privileges regarding the use of this information. Any unauthorized use, such as copying, modifying, or reprinting, will be prosecuted under the fullest extent under the governing law.