January 19, 2005

VoIP is not VoIP is not VoIP

A few days back, there was a discussion as to whether Covad’s Line Powered Voice is VoIP or PSTN. But in a short order, there was a general agreement (comments to Om's entry, Om, Phoneboy and Andy) that it is not VoIP. Now Dr. Daniel Ryan has given a succinct summary of different forms of VoIP and also tells us what different regulators think about each of them. I could more easily put forward why many VoIP services fall under standard regulatory framework by using the architecturally based characterization that Dan uses.

Dan divides potential VoIP service providers into 5 groups:

  1. PC-to-PC VoIP, pure VoIP like Skype (and I suppose other IM systems)
  2. Phone-to-Phone over the Public Internet, non-geographic (like Vonage, I like Pulver’s term “Parasites”)
  3. Fixed Local Networks with IP Throughout, fixed location for access (like Optimumvoice from Cablevision and other cable providers. Note that these players not only do not object, but they want regulatory parity with ILECs, because that is their competition)
  4. Traditional Local Loop with VoIP in the Local Architecture, where the existing PSTN service provider is replacing network elements to IP technology purely for operational reasons
  5. IP in the Interoffice or Long Distance Network, like AT&T Long Distance network (not to be confused with CallVantage).

He points out that there is a general agreement between the regulators that category 1 is not to be regulated and that category 5 can not be free of regulation. He suggests that category 4 will not escape regulation; category 3 is iffy. For me all this suggests that only category 2 is under discussion. I suggest that this confusion and uncertainty is created because of “geographical” red herring. The way to look at it is the network architecture and Carterphone precedence. If you recall, Carterphone basically identified the boundary of the network. It gave birth to new terminology, NT reference point.

I suggest that we look at the NT reference point to decide whether something is PSTN or not. For category 4 there is no change in the NT reference point. So there shouldn’t be any change in the regulatory regime as well. For category 1, the NT reference point is only at the application layer. More importantly, a user can concurrently have business relationship with multiple service providers, because there can be multiple reference points. This is the fundamental reason to suggest that there are no reasons to have regulatory restraints on such service providers.

In categories 2 and 3, the decision on the regulatory regime should depend on where the service providers want to place the reference point. So consider the cases where the service providers “own” the ATA and do not allow the customers to customize the ATA. In these cases, it is clear that the ATA is on the network side of the NT reference point, which means there is no difference between this and the standard PSTN. So there shouldn’t be any difference in the regulatory regime as well. If on the other hand, the user owns the ATA, then as in category 1, the user can concurrently have business relationship with multiple service providers. So the service providers who provide such freedom must be free of regulatory constraints.

For example FWD and SIPPhone allow their subscribers to own the ATA. Coincidently, using a different logic FCC has concluded that they are not regulated. Some of the other providers (you can lookup who they are or can ask SIPPhone) “own” the ATA in one form or another. For example they may “lock” the ATA so that can access only one proxy or the subscriber has to return the ATA if the service is terminated. My reasoning suggests that they should be regulated as if they are PSTN providers. But so far FCC has not made a general ruling. But NT gives a framework to classify the service providers and place regulatory regime on these classification in a consistent manner.

Added later:
Nothing here suggests that previously granted rights of a called PSTN user can be compromised by an unregulated VoIP service provider. Some of these rights are the ability to trace a call and rules regarding recording a call. I want to bring to your attention that some VoIP service providers will not be able to assist law enforcement authorities in tracing a malicious call (I am NOT talking about CALEA here). The question we need to address is how do we reconcile the conflict.

Posted by aswath at January 19, 2005 05:27 PM
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