State regulators face tough choices in deciding regulatory treatm...

regulating Internet telephony Tues. The basic question remains whether a VoIP provider such as Vonage is a telecom service, he said. If a state PUC decides Vonage isn’t providing telecom service, “it can’t then go back when the service reaches a 50% market share, if it ever does, and say we made a mistake, we should regulate,” Ramsay said. A regulator can’t “knock himself out of the game” like that, he said. Whether VoIP providers like it or not, if they are providing telephony service they have obligations under the law to provide such things as 911 capability, universal service funding, network reliability and access to law enforcement agencies, Ramsay said. A decision last month by the Minn. PUC subjecting Vonage to wireline regulation (CD Sept 9 p5) was “the tip of the iceberg” on the issue of state regulation, said Scott Marcus, the FCC’s senior adviser for Internet technology, also a panelist at the forum. “It would be nice if someone at the FCC spoke up and preempted the states,” said Internet consultant Jeff Pulver, also a panelist. Regulators should reform “outdated carrier compensation and universal service regulations” before applying them to VoIP, AT&T Internet & E-Commerce Dir. Marilyn Cade said. “Regulators need to be aware that if they do something to Voice-over-IP they might impede the development of other applications,” she said. Verizon Internet specialist Link Hoewing said the problem was that when regulators in Minn. looked at Vonage it looked like a telephony service, “with dial tone, all the features of a regular phone service.” Marcus noted, however, that applying tariff and certification requirements on Vonage, which would require it to incur the cost of retaining lawyers for a very small customer base in Minn., “might result in Vonage withdrawing from the state.” Hoewing said he didn’t advocate economic price regulation of VoIP providers but as the technology matures, states should address those issues. He said an AT&T petition asking the FCC to free its phone-to- phone IP services from the access charges regime was different: “AT&T’s petition is an end run around access charges.” Ramsay said he agreed: “There is no reason not to call what AT&T is doing telecommunications.”