Aswath Weblog

Random Notes from Senate Hearing on VoIP

A couple of serious points and a couple of chuckles:

1. Can VoIP service providers move offshore?
2. Does Yahoo!Phone offer primary phone service?
3. New analogy
4. PSTN crawls while IP flies.

1. Can VoIP Service Providers Move Offshore? This question (or a threat as I view it) was asked once more. The same question was raised in FCC VoIP forum in December 2003. At that time, none other than Pulver himself said that that fear is unfounded. It is too bad he was not one of the panel members today.

The only monetized service offered by VoIP service providers thus far is interconnecting to PSTN. I do not see how an offshore company can offer a more economical interconnection than a national one. By the way, I am skeptical that VoIP service providers can monetize any other service, just because the users can realize the service themselves. So there is little marginal value.

2. Kevin Werbach mentioned some thing to the effect that 3 million users receive primary phone service using VoIP technology. I suspect that he is referring to Yahoo!Phone service. I am of the opinion that this is misleading. Yahoo!Phone subscribers also subscribe to PSTN phone service from NTT and emergency calls and power failures are handled by the PSTN.

3. If it walks like a duck, …is so passé. The new analogy will be stagecoaches, trains and planes. McCain seems to suggest that just as planes do not pay taxes to the cities it flies over, VoIP traffic should not pay state and local taxes for its traffic. Don’t planes and air travelers pay airport taxes to the local authorities? So why shouldn’t VoIP traffic pay taxes for interconnecting to the PSTN? What is so special about VoIP, when it interconnects to PSTN? I view it as an alternate transmission technology.

4. A nitpick. Some Senators seem to suggest that VoIP is traveling at “light speed” and that is why it is special. I hope somebody corrects them: PSTN traffic also travels at the same speed.

Let me repeat my mantra: IP networking is special not because it allows new service providers to enter the market. The real benefit is because, the users do not require ANY service provider if they so choose. We should recognize this lest we loose it.