Regulators spar over VoIP technology

Kevin Rademacher

Wednesday, Oct. 13, 2004 | 10:36 a.m.

Many questions -- and no answers -- about the future of the telephone communications came out of Tuesday's sessions at an industry convention in Las Vegas.

At the center of the uncertainty is the emerging Voice-over Internet Protocol technology, which allows telephone calls to be sent over high-speed Internet connections instead of traditional telephone lines.

A panel of state utility regulators from across the country sparred over the effect the as-yet unregulated technology could have on the existing telecommunications system.

Chief among the concerns is that VoIP technology is not required to carry 911 emergency service or provide with federal wiretapping access requirements. The VoIP providers also are not paying into the so-called universal service funds, which subsidize service to rural communities.

Susan Kennedy, a member of the California Public Utilities Commission, said the state currently collects about $1 billion each year through the universal service fund. She said some projections show that the collections could be cut in half within four years as VoIP takes hold in the market.

"We have to change the way we are funding the universal service fund," she said. "It will never be OK to have high-density states have better service than low-density states."

Panel members debated the creation of a federally funded universal service plan and calling for a new look at the plan which would levy fees based on phone numbers provided regardless of the technology used to deliver the service.

Still some regulators have taken the stance that regulators should leave VoIP providers alone in an effort to allow the new technology to take hold in the marketplace.

"I'm just not sure we are to market viability yet on VoIP," said Greg Sopkin, chairman of the Colorado Public Utilities Commission.

Regulators pointed out that without 911 service, VoIP is rendered unusable for consumers with medical problems, young children or elderly residents in the home.

Sopkin argued that market pressure will force VoIP providers to add the service if they want to gain widespread market acceptance.

"The market is clearly telling VoIP providers that they need to get that done," Sopkin said.

Paul Alfonso, chairman of the Massachusetts Department of Telecommunications & Energy, also cautioned that states may need to revise existing statutes to work more effectively with new technologies.

"Some of the state statutes are very nimble," he said. "They were created for a telecommunications industry that doesn't really exist anymore. We need to amend these statutes or we are not going to have very much flexibility."

Bob Sahr, chairman of the South Dakota Public Utilities Commission, said taking the time to create a workable system for the states and the new technology providers was worth the effort. VoIP and other new technologies, he said, could ultimately provide viable competitors for incumbent systems -- and ultimately lower prices -- in markets where such competition has come up short.

"I look at VoIP as an opportunity to give us a check against the current (system)," he said.