Aswath Weblog

Cable Providers’ View of VoIP

About 10 days back, National Cable & Telecommunications Association (NCTA) issued a whitepaper that describes their position on regulating VoIP. This is an interesting read because it gives insight into how they view VoIP. In hindsight, John Billock of Time Warner gave a preview during his comments at FCC Forum in December 2003. He basically said, he does not mind VoIP being regulated because he viewed it as a facilities based service offering. This white paper gives additional details and the rationale for their position.

They offer a definition for VoIP that fits their potential service offering like a glove. Then they say what regulations are appropriate for this definition. I am of the opinion that the set of regulations they stipulate are reasonably fair-minded, especially when this is their initial position. A potential VoIP service offering may not fit this definition in different ways and reasonable people could differ what regulatory regime to impose on these service offerings. Also, I suspect that some VoIP purists will be slightly disappointed that cable operators are viewing VoIP as more of an access technology rather than a radically new application technology.

First they identify a four-part test for a service to be identified as VoIP that needs to be regulated:

1. it makes use of North American Numbering Plan (“NANP”) resources;
2. it is capable of receiving calls from or terminating calls to the public switched telephone network (“PSTN”) at one or both ends of the call;
3. it represents a possible replacement for POTS; and,
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 offering meets these four criteria, then they feel that the service provider has some rights and responsibilities. They grant VoIP service providers should meet certain public policy responsibilities and requirements such as the principles set forth in the Communications Assistance for Law Enforcement Act (“CALEA”), the offering of 911/E911, access for the disabled, and appropriate contributions to universal service. In return, they should have the right to interconnect and exchange traffic, the right to obtain telephone numbers and have them published in telephone directories, the right to access the facilities and resources necessary to provide VoIP customers with full and efficient 911/E911 services, the right to be compensated fairly for terminating traffic delivered from other entities and the right to non-discriminatory access to universal service support. In addition, facilities-based VoIP providers need access to poles, ducts, conduits and rights-of-way, regardless of the ultimate regulatory classification of VoIP services. Since these service providers are new entrants and not monopolies, they argue that legacy requirements related to billing, payment, credit and collection, and quality of service standards should not be imposed on them. Except for a mild reservation on the last aspect, their points seem to be fair on the whole.

What if a service provider who does not meet all the criteria? Let us take FWD and AT&T as two examples. FWD clearly does not meet the first three criteria and the general sentiment is that they should not have to meet any of the regulatory requirements. AT&T, if it uses VoIP as a transport technology between two segments of PSTN, does not meet at a minimum the fourth criterion. I am of the opinion that they are obligated to pay interconnect charges. At least in my reading, this white paper does not have a position on this point.