WASHINGTON, D.C. - Voice over Internet Protocol (VoIP) regulation should be based on a balance of responsibilities and rights for companies introducing those services to the U.S. public, according to a white paper issued today by the National Cable & Telecommunications Association.

Noting that the cable industry has been among the leaders in developing VoIP services for the residential market, the paper, entitled "Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition," proposes that even the most vital public policy objectives should be secured through the "lightest possible regulation" of VoIP services.

Because VoIP is an Internet-based service with global reach, NCTA suggests that state regulation of VoIP service should be consistent with the approach adopted by the federal government.

"Facilities-based VoIP services can be the breakthrough that fulfills the vision of the Telecommunications Act of 1996 for vast numbers of residential consumers," NCTA says. "The cable industry stands ready to play a lead role, just as it has done in making residential broadband Internet service a widespread and desirable service. This breakthrough will occur most rapidly and ubiquitously if federal and state policymakers and regulators affirmatively promote VoIP services as an important policy objective and adopt a predominantly deregulatory approach to VoIP services."

"Only a minimally regulatory framework can create the right incentives and a favorable climate in which service providers can invest, innovate, and deploy VoIP services," NCTA says.

The NCTA white paper proposes a four-prong baseline test to determine whether a particular IP-based voice service should be subject to the regulatory framework proposal. The test is based on whether the service has the following characteristics:

1. It makes use of North American Numbering Plan resources;
2. It receives calls from or terminates them to the public switched telephone network at one or both ends of the call; and,
3. It represents a possible replacement for "plain old telephone service."
4. It uses Internet Protocol transmission between the service provider and the end user customer, including use of an IP terminal adapter and/or IP-based telephone set.

If a service meets these qualifications, NCTA suggests that instead of assigning a specific regulatory "box" or classification to VoIP, policymakers should focus on the responsibilities and rights appropriate for a facilities-based provider of such VoIP services. NCTA proposes a regulatory roadmap that would:

1. Assign to VoIP service providers vital responsibilities, such as assistance to law enforcement and public health – including the principles outlined in the Communications Assistance for Law Enforcement Act (CALEA), the offering of 911/E911 services, and access for the disabled; contributions as appropriate to the Universal Service Fund (USF); participation in intercarrier compensation; and general consumer protections.
2. Suggest certain responsibilities that VoIP providers may undertake on a voluntary basis, but which should not be imposed.
3. Identify specific rights essential for successful deployment of VoIP services, including efficient exchange of traffic on public and private networks, number portability, access to 911/E911 resources, proper compensation for terminating calls, non-discriminatory access to universal service support, and access to rights-of-way and other facilities without incremental fees.

NCTA notes that several proceedings now under way at the Federal Communications Commission – including deliberations on USF, a rulemaking on intercarrier compensation, and the Commission's announced intention to commence a rulemaking on VoIP regulation itself – may better define the elements of the roadmap.

VoIP is a technology that enables voice traffic to be packetized and transported or routed as data, without the need for the traditional circuit switching common to most incumbent telephone providers. NCTA points out that, while the term VoIP has come to mean voice telephone service offered through Internet protocol technology, IP-based voice services vary widely and include many applications with multiple features that extend beyond simple voice conversation.

The white paper also details cable deployments of IP-based voice services. They include:

Cablevision Systems, which launched Optimum Voice, a VoIP-based service, in the fourth quarter of 2003 throughout its New York City metropolitan service area of four million homes. Optimum Voice is currently the largest facilities-based VoIP deployment in the U.S.

Charter Communications , which launched commercial VoIP service in September, 2002 in Wausau , WI , and will launch VoIP service in several other markets this year.

Comcast, the largest cable company, with 1.3 million existing circuit-switched telephone subscribers nationwide, and which is currently testing VoIP near Philadelphia and plans to test the service in Indianapolis, IN and Springfield, MA in 2004.

Cox Communications , which launched its first VoIP service, Cox Digital Telephone, in December 2003 in Roanoke , VA. While this is the 12^th market in which Cox has introduced phone service, Cox relies on traditional circuit-switched technology in its other markets.

GCI Cable Inc.(GCI), has begun deployment of a hybrid VoIP/circuit switched service in Anchorage , AK , this April. The service will be packet based from the customer premises to a media gateway and then use GCI's circuit-switched facilities.

Time Warner Cable, which launched Digital Phone, its VoIP service to subscribers in Portland , ME , in May of 2003, and recently launched the service to select customers in North Carolina . Time Warner plans to offer the service to most of the major markets is serves by the end of 2004, a 27-state footprint that includes 11 million subscribers and over 18 million homes passed.

Cable's introduction of VoIP services will further extend industry efforts to provide competitive facilities-based local phone service, NCTA said. Today, MSOs including Cablevision, Comcast, Cox Communications , GCI and Insight Communications provide competitive local phone service that is predominantly circuit-switched to some 2.5 million customers.

"Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition," is available on the NCTA website, www.ncta.com, or from the NCTA Communications & Public Affairs Department by calling 202/775-3629.

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Related Publications

2/2/2004
"Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition"Email this Document
Abstract: NCTA White Paper suggests that Voice over Internet Protocol regulation should be based on a balance of responsibilities and rights for companies introducing those services to the U.S. public.Attachment: VoIP_White_Paper_02.02.04.pdf (160 KB)Publication Type: White Paper