VoIP Fuels OSS, but Will Regulators Crash the Party?

By Edward J. Finegold

VoIP is a technology, a service and a topic for regulatory debate. While VoIP technology and services have great potential, key decisions that will drive its future in the United States are yet to be made. While VoIP's progress as both a technology and a service can be assessed, what its final regulatory trappings will look like cannot. The FCC has made some statements in favor of a non-regulatory approach to certain Internet-based VoIP applications, but there may be very little else about VoIP that is de-regulatory in the end. Those service providers investing in VoIP in spite of what may come face a market full of developing products - both network and OSS - that in some cases are six months to a year away from functional maturity. The next year may see VoIP's future dictated in the United States, and what's at stake is critical both for Americans and the OSS business.

The Greatest Nation on Earth
The United States is patriotic to where Americans - particularly America's leaders - repeatedly insist to the rest of the world that ours is the greatest nation on Earth. This judgment depends entirely on one's perspective. When it comes to things like entertainment, military capability, and cold hard cash, the United States is clearly number one. But when considering other facets that are important to people's lives - like healthcare, education, transportation and communications - the United States continues to fall behind. VoIP represents an opportunity for the United States to remain in stride with the developing global economic community that is being fueled by deregulation and Internet-born technologies. Regulators, however, have the opportunity to cut U.S. corporations and residents out of this bigger picture.

Without regulatory barriers, VoIP can be the staple capability to provide a foundation for numerous integrated services that connect people and enable business in new, more effective and more compelling ways. Regulating VoIP like a common carrier service, and protecting the rivers of cash that flow from existing voice regulations, will do little more than hinder the United States in the midst of a communications race that places like Korea, Japan, China, India and Western Europe are already winning.

Unfortunately, it appears increasingly clear to those in the know that a de-regulatory approach to VoIP just isn't likely. "I feel strongly that the revenue stream that is now made up of things like access charges, subscriber line charges and the like is not going to go away because you're using packets instead of circuits. You'll have some equivalent mechanism that pays the same people that get paid now," says Robert Curtis, senior vice president of strategy for Z-Tel, a strong CLEC that continues to fight regulatory battles in the DC circuit courts and on Capitol Hill. For the people running ILECs today, it's protecting numbers for the short term that matters. People and businesses in the United States will pay for their myopia, however, both with arbitrary rates and a growing inability to compete on level ground with nations that encourage, rather than restrain, communications advancement.

British Telecom Outs the ILECs
A crystal clear example of where U.S. ILECs should be steering VoIP - in their networks and in Congress - comes from their counterpart in the United Kingdom. On June 9 the BBC released a report examining British Telecom's plans to transition its entire voice network from POTS technology to broadband and VoIP. While the initial testing and trial stages are underway today, BT plans to spend £3 billion to gradually migrate its customers to an all VoIP network by 2009, with mass migration beginning in 2006.

BT has already begun building its operational infrastructure for its enterprise VoIP services. MetaSolv recently announced successful completion of its first wave of OSS deployment for BT including order management, inventory and activation systems. BT has publicly stated that these new systems are already providing them with 97 percent order success rates and 50 percent reductions in time-to-provision. The UK's largest network operator expects the cost savings resulting from its transition to VoIP to equal roughly £1 billion per year, according to the BBC.

Meanwhile, in the United States, the ILECs may be offering a lot of lip service around their commitment to VoIP, but they are not following it up with action. "We see carriers in the U.S. that, because they don't know where the regulation is going, are making decisions lightly," says Derek Bell, product manager for discovery and activation solution provider Syndesis. "They (tier one carriers) want to be larger than life and say they are in this VoIP game when they really aren't investing in this technology. They look at it from a tariff standpoint, not as something new and different." adds Bell.

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