VoIP to Gain Greater Appreciation, Experts Say
The VoIP market will see a better regulatory environment under the Obama administration, which favors net neutrality and broader broadband infrastructure deployment, lawyers said. They also forecast more market entrants in the next few years, a new competition model and closer consolidation review. Meanwhile, analysts worried over the impact of a tough economy on VoIP providers.
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VoIP stands to get better carrier interconnection rights and recognition among policy-makers now that the telecom industry is evolving toward Internet telephony, said attorney Andrew Lipman. He also expects better global VoIP opportunities, saying the next FCC, State Department and the U.S. Trade Representative would press for rule relaxation in countries that have more restrictions on VoIP, such as Mexico, India and China.
A net neutrality backer, Obama would favor policies that prohibit discrimination and rationing of capacity, Lipman and attorney Greg Taylor said. The bandwidth increase would mean better VoIP service quality, Taylor said. Obama’s net neutrality position also reflects his environmental policies, he said. If the reliability and performance of VoIP and videoconferencing can be improved, business travel could be reduced, he said.
Among the providers that would benefit from the new administration is Skype, Lipman said. The new FCC would be generally more sympathetic toward the VoIP provider’s Carterphone petition, which was denied by the FCC earlier, he said. The company would also benefit from new policies favoring open devices and networks, Lipman said.
The competition model and regulatory review of telecom consolidations are set to change, lawyers said. The market would move from intermodal toward intramodal competition, meaning more competition among the Bells, competitive local exchange carriers and VoIP providers, Lipman said. A new model would mean a surge of new market players, Taylor said. The more the providers can diversify their services, the more likely they will survive, he said. The new administration will likely watch more closely large mergers and joint ventures, Lipman said. Attorney Neil Ende agreed more scrutiny on the scope of consolidations is likely.
Broadband penetration, the most important part of VoIP, will get a push under the new administration, Lipman and Taylor said. Obama sees infrastructure initiatives as creating jobs, they said. He would emphasize broadband deployment through wireless technologies and more Internet access in schools and healthcare facilities, they agreed. There should be subtle changes on the Universal Service Fund, Lipman said. But he emphasized there would still be important policy shifts, favoring smaller, competitive carriers.
Analysts saw a less promising 2009 for VoIP service providers and equipment vendors, saying they've already seen a slowdown. Global Q3 service VoIP equipment sales were down eight percent sequentially to $816 million, said analyst Stephane Teral of Infonetics Research. But he still called the outlook “decent,” given the global economic climate. Operators are poised to focus next year’s budgets on reducing costs, meaning weaker demand for VoIP products, said research firm Dell'Oro Group.