July 27, 2005
Major Reform of Telecom Act Proposed
By Roy Mark
WASHINGTON -- Sweeping legislation to deregulate the U.S.
telecommunications market finally hit Congress today. Long awaited and much
anticipated, the bill calls for stripping away many of the current federal
and state rules for the delivery of voice, video and data services.
Introduced by Sen. John Ensign (R-Nev.) and co-sponsored by Sen. John
McCain (R-Ariz.), the Broadband Investment and Consumer Choice Act aims to
level the playing field between telephone, cable and satellite companies
while opening the door for the delivery of emerging broadband services.
Ensign's bill specifically calls for eliminating state and local franchise
requirements for all video providers, including telephone companies moving
into the field. Existing cable franchises would cease to exist upon
enactment of the bill.
Ensign said state and local authorities would be protected from financial
losses under his bill by requiring video providers that use existing rights
of way to pay local authorities a fee of up to five percent of gross video
revenues.
Broadband services, regardless of technology platform, are largely freed
from federal and state regulation at both the wholesale and retail levels.
The bill further states that consumers may not be denied access to any
legal content provided over the facilities used for broadband
communications, including Voice over IP (define) port blocking.
"Americans' ingenuity and creativity can provide more choices for consumers
if government bureaucrats will get out of the way and allow our companies
to compete," Ensign said at a Capitol Hill press conference. "Technology is
moving forward but current laws are not."
As for interconnection fees between broadband providers and
facilities-based providers, the legislation says the parties are required
to establish "commercial arrangements." The Federal Communications
Commission (FCC) would only intervene if they fail to reach an agreement.
The legislation also targets state and local governments considering
establishing their own broadband networks. Under the bill, local
municipalities must give the private sector notice before going into
business for themselves and allow non-government providers to bid on the
project.
"We need to modernize our communications laws. Instead of stifling,
government-managed competition, we need to move to market-controlled
forces," Ensign said. "We need to get the investment dollars flowing."
Ensign cited the cell phone industry as a model of innovation with minimum
government regulation. "This is the type of competition we want between
cable and telephone companies," he said.
Incumbent telephone companies will be required to continue to provide
unbundled access to their copper lines until 2011 and to make narrowband
communications available for resale at rates established by the FCC.
The FCC also retains the authority granted in the 1996 Telecommunications
Act to require service providers to comply with wiretapping requests. In
addition, Ensign's bill retains prohibitions on obscene Internet materials.
The bill does not, however, deal with reforming the Universal Service Fund
(USF), an issue Ensign said he was leaving to Senate Commerce Committee
Chairman Ted Stevens (R-Alaska).
Ensign's legislation drew a flurry of statements in support of telecom reform.
"Senator Ensign has produced the most deregulatory communications bill ever
introduced in Congress, and, commendably so, in light of the vast
marketplace changes that have occurred since passage of the 1996 act," said
Randy May, a senior fellow at the Progress and Freedom Foundation.
Roger Cochetti, group director for U.S. public policy at the Computing
Technology Industry Association, added, "Since the Telecommunications Act
of 1996, the convergence of markets, the rapid advance of information and
communications technology, and the ubiquity of the Internet have pushed the
96 Act to its limits.
Cochetti said while the Telecom Act did much to update the nation's
regulatory structure, "It is timely and appropriate that we revisit that
landmark legislation."
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January 13, 2004
Sununu Drafting VoIP Bill
By Roy Mark
U.S. Sen. John E. Sununu says he is drafting a bill to keep Internet
telephony beyond the reach of state and federal regulations that govern
traditional telecoms.
The Federal Communications Commission (FCC) began proceedings in December
to determine what, if any, telecom taxes and rules should apply to the
quickly emerging Internet telephone business built on Voice over IP (VoIP)
(define)> technology.
"Congress must establish pre-eminence of federal authority in this area and
provide major direction for any action by the FCC," the New Hampshire
Republican said late last week at the CES show in Las Vegas. "I'm afraid
the benefits of VoIP will be smothered by state and federal regulators. A
clear pre-emptive remedy is needed now."
VoIP technology presents problems for regulators because the new industry
doesn't fit traditional telecom regulatory models. While it clearly
provides telephone service, it does it by turning voice packets into data
packets and does so over the virtually unregulated Internet, both public
and private, instead of the heavily taxed and regulated public switched
voice telephone networks (PSTN).
The Internet telephone industry claims it is not a telecom since it does
not deal in voice traffic. As the major telecoms and cable companies join
start-up VoIP ventures in moving voice traffic over the Internet, the issue
becomes critical for cash-starved states that raise hundreds of millions in
revenues by taxing traditional telephone services.
California says since VoIP providers use conventional telephone lines to
connect their calls, they are a telephone company and is seeking to collect
access fees. Washington, Oregon and Florida are also skirmishing with
Internet phone companies on the same issue.
In the only court decision, however, a federal judge spiked Minnesota's
attempt to regulate and tax telephone service offered by Edison, N.J.-based
Vonage, ruling the company does not have to register as a telephone company
in order to conduct business in Minnesota.
"Voice communications are at a watershed moment. The adoption and
deployment of VoIP applications allow providers to completely reject old
ideas and limitations over voice communications," Sununu said in his
official Las Vegas statement. "Beyond improving productivity and creating
valuable new service features, the innovation created by VoIP applications
forces a complete shift in the way traditional voice communications are
viewed."
At the Dec. 1 opening hearing on VoIP, FCC commissioners and a wide range
of VoIP experts, including some state regulatory officials, agreed that
only a light regulatory touch, mainly involving public safety (911
availability), law enforcement (legal wiretap accessibility) and disability
issues (equipment), should be brought to bear on the nascent industry.
FCC Chairman Michael K. Powell said at the hearing he "unflinchingly
(believes) in maintaining an Internet free from government regulation" and
firmly supports the idea that the Internet telephony industry should
"evolve in a regulation-free zone."
The FCC will now gather additional information and public comment about the
issue. The process is expected to take at least a year.
"VoIP providers should be free from state regulation, free from the
complexity of FCC regulations, free to develop new solutions to address
social needs, and free to amaze consumers," Sununu, a member of the Senate
Commerce, Science, and Transportation Committee, said.
Details of Sununu's proposed legislation were unavailable as of Tuesday
morning.
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Pulver Counsel Pans Telecom Reform Bill
August 1, 2005
By Roy Mark
WASHINGTON -- A major telecom reform bill iintroduced last week by Sen.
John Ensign brought the Nevada Republican a blitz of favorable comments and
praise. Think tanks and IT trade groups alike rushed to praise the
"sweeping" and "timely" legislation.
Not so fast, said Pulver.com general counsel Jonathan Askin.
"We'll be stuck with another five years of implementing it and 15 years of
litigation," Askin told internetnews.com. "It's a definitional shell game.
Miraculously, a telecom service becomes an information service."
The legislation seeks to level the playing field between all advanced
communications services with a deregulatory approach to how services are
categorized. Askin said the bill, in fact, will likely create more rules
and regulations for Internet Protocol (IP) developers and providers and
Voice over Internet providers in particular.
For Askin, the issue is not what the Ensign bill removes from the 1996
Telecommunications Act, but what it leaves in. "It imposes 'social
obligations' on standalone VoIP providers," he said. "It puts regulations
on previously unregulated companies."
The social obligations will likely involve wire tapping accommodations,
handicap access and Universal Service Fund obligations. The FCC already has
imposed E911 obligations on VoIP providers, a decision Askin claims forces
Internet telephone providers to develop "backward looking" technology.
Pulver.com Enterprises controls approximately 20 operating companies
touching various aspects of IP-based communications. The company's founder,
Jeff Pulver, first gained Washington's attention when he successfully
petitioned the Federal Communications Commission (FCC) to exempt his
computer-to-computer Free World Dialup from FCC regulations.
If the Ensign bill ultimately passes, Askin predicts, "We'll be sucked back
into a regulatory regime we never asked for. We'll be brought into a
regulatory quagmire."
That day, however, may be a long time in coming.
Despite the favorable publicity generated by Ensign's Broadband Investment
and Consumer Choice Act, the bill has yet to have hearing in the Senate and
companion legislation in the House of Representatives has not been
introduced. In both houses, competing legislation less sweeping in scope
are working their way through the legislative process.
"In the House, we're trying to narrowly target telecom reform and it will
probably only deal with IP services," a Capitol Hill staff lawyer told
internetnews.com. "I'll be surprised if we get something on the president's
desk by the end of the 109th Congress."
The current two-year Congress is scheduled to adjourn late in 2006.
Askin said he favors legislation introduced last year by Sen. John Sununu
(R-N.H.) that called for exempting IP services from telephone access
charges. The bill did carry some federal obligations on VoIP providers but
excluded applications, such as Pulver's Free World Dialup, that do not
interconnect with the public switched network.
The legislation failed when lawmakers feared the potential revenue loss to
states.
"It got mired down and done in by forces beyond our control," he said. "And
don't think the entrenched power structure in Washington isn't going to
have a big say in this [Ensign legislation]."
Askin, a former senior attorney in the FCC's Common Carrier Bureau, said
what is really needed is "unfettered competition at the application layer.
We need to combine the free market with IP technology. We need for either
Congress or the FCC to embrace an Internet freedom empowerment principle."
Fighting words, perhaps. But then, Askin identifies himself on his business
card as a "Wartime Consigliere."
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