MCCAIN WANTS COMMITTEE MARKUP OF VoIP BILL BY END OF YEAR

Comments by other senators at the hearing reinforced the difficulty of the issues raised by the bill (S-2281). Sen. Stevens (R-Alaska) said he had “a problem with the universal service aspects of this bill” because he feared it could result in a drop in payments into the universal service fund. Rep. Dorgan (D-N.D.) said he “would not support the bill as written” because of the same universal service concern. “It is important to know what support mechanisms will remain in place,” Dorgan said. He said the bill called for a flat-fee payment of universal service and “I don’t know how that math works.” Dorgan said he didn’t think holding a markup this year was “timely.” Sen. Burns (R-Mont.) also expressed concern about the bill’s treatment of universal service and E-911 requirements for VoIP providers. “The marketplace does not always provide critical services like 911,” Burns said: “I don’t know if it’s time to pass this legislation or not [but] I'm glad the debate has begun.”

The bill deals with several issues stemming from the growth of VoIP telephony service by: (1) Giving federal jurisdiction to VoIP and preempting the states from regulating it. (2) Clarifying the definition of VoIP as an information service. (3) Outlining VoIP providers’ universal service contributions. (4) Requiring an industry group to work out E-911 emergency calling requirements and disability access. (5) Exempting VoIP providers from the access charge regime but requiring the FCC to work out a new system for intercarrier compensation. (6) Stating that law enforcement’s access to VoIP has to be the same or better than access available for information services today. (7) Stating that the new service won’t be taxed at the state level.

A similar bill (HR-4129) introduced in the House by Rep. Pickering (R-Miss.) would allow CALEA to apply to VoIP if the FCC can determine it’s feasible. Pickering has said members of the House Commerce Committee would be adamant in requiring appropriate law enforcement access. And while Sununu’s bill wouldn’t require access charges to be applied to VoIP, Pickering’s bill would let it be considered by the FCC.

Some witnesses at the hearing questioned whether the bill was strong enough to protect consumers, for example against drops in universal service funding and inadequate E- 911 funding. Arturo Macias, gen. mgr. of Wheat State Telephone in Udall, Kan., called the bill “premature” because it doesn’t adequately address cost recovery for rural telephone companies: “The most troubling aspect of S-2281 is that it places an explicit ban on the application of access charges to VoIP services. Instead, the legislation allows for cost recovery through reciprocal compensation, which only covers a fraction of rural telephone companies’ costs of providing access, or through bill-and-keep, which is another way of saying ‘free.'” He warned that “rural consumers will not be able to enjoy the benefits of [VoIP] if the underlying networks operated by rural telephone companies are compromised due to lack of adequate cost recovery.”

Much of the hearing was devoted to concerns expressed by a Justice Dept. officials about whether the bill should be strengthened to assure law enforcement access to VoIP. “How you treat this service will profoundly impact the Department of Justice’s ability to protect communities across the nation from the harms inflicted by drug trafficking, organized crime and terrorism,” said Deputy Asst. Attorney Gen. Laura Parsky. “We are concerned that S-2281 could create a safe haven for criminal activity by not preserving the application of CALEA to new technologies,” she said.

Parsky got into lengthy discussions with several senators, including Sununu, about how much access DoJ really needs and whether the agency is asking for too much. “We are seeking to find the right balance -- access to technologies that replace traditional means of communications, the voice network,” Parsky said. “We need examples of where you have problems,” said Sen. Wyden (D-Ore.): “You seem to be looking for a remedy for a problem that hasn’t been documented.” Parsky responded that CALEA’s original concept was to develop solutions ahead of time, “as the technology develops,” which is “less expensive” than later solutions.

James Dempsey, exec. dir. of the Center for Democracy & Technology, said he had “no quarrel” with law enforcement’s right to intercept but “the Internet today is not a haven for terrorists and drug dealers and there is nothing in the Sununu bill that would make it so in the future.” He said “tapping the Internet will be different than tapping the telephone system but on balance it will be no harder once law enforcement gets up to speed on the technology.”

Sununu said he was concerned that if Congress didn’t act quickly, many states will pass their own legislation which will have to be repealed, “not something easily done.” However, Ga. PSC Comr. Stan Wise said the committee might be moving too hastily. “Don’t you think it’s the other way around,” Sununu asked him, noting the speed with which states are passing laws. Sununu also questioned Wise’s argument that state regulation shouldn’t be preempted as called for in the bill because state regulators provided consumer protection. Sununu asked if Wise thought federal agencies weren’t concerned about protecting consumers. Wise responded that many consumers go to state govt. first.

Several senators cited concerns expressed by the National Governors Assn. (NGA) in a letter that McCain added to the hearing record. The letter urged the committee not to act on S-2281 because while it “may be well-intended, the bill is a premature response to an emerging technology that fails to adequately address the wide variety of complex issues.” NGA said policymakers should approach new technology issues “holistically, and ideally, develop policy that does not create different rules for different technologies.” The Assn. of Public-Safety Communications Officials (APCO) said in a letter, also added to the record, that it doesn’t think industry guidelines for E-911 deployment “will be sufficient.” APCO said Congress shouldn’t restrict the FCC from adopting “narrowly tailored” E-911 rules for VoIP providers that interconnect to the public switched network.