My Take On Today's FCC VoIP Ruling

I've spent most of today reading the text of today's critical FCC decision determining that VoIP services such as Vonage's DigitalVoice are not subject to traditional state public utility oversight.

The FCC believes that because customers of DigitalVoice and similar services can use their phones from a broadband connection anywhere on the planet, it is next to impossible to determine whether a VoIP call is local, interstate or even inernational. Because VoIP calls cannot be defined by separate interstate and intrastate components, it would be inefficient for these calls to be subject to a patchwork of local regulations.

As with the Minnesota Public Utilities Commission ruling that the FCC overturned today, a state cannot unilaterally order a VoIP services provider to offer emergency 9-1-1 service comparable to an ILEC.

It's clear from a read of Chair Michael Powell'swritten opinion that while he regardsVoIP 9-1-1 as a feature that is notunder theauthority of a stateregulatory body to require, VoIP providers already know it is in their best interest to do so - and are already seeking and enacting solutions to make that happen.

Powell apparently has much faith in the National Emergency Number Association's joint efforts with several VoIP providers to, as he put it, "promote a fully functional 9-1-1 system that responds any time, anywhere from any device."

Although today's decision was unanimous, a careful read of the concurring statements authored by two other FCC comms. seem to indicate considerably less faith than Powell has in the inevitability of 9-1-1 without more of a regulatory push to do so.

Commissioner Jonathan Adelstein wrote: "I also have reservations about our pre-emption of a State's efforts to ensure the public safety of its citizens, based here on the linkage of the 9-1-1 requirement with a State certification. Our approach of overriding States'public safety efforts without clear federal direction takes us into a dangerous territory in which consumers may come to rely on services without the benefit of the critical safety net they have come to expect."

Commissioner Michael Copps was evenmore strident, urging that national consistency in VoIP 9-1-1 should be explored by a "universal service solutions summit" involving varioustelecommunications communications industry,regulatory, and first-responder agencytelecommunications officials.

The Commission did not, as some had hoped, specifically prohibit jurisdictions from imposing taxes on VoIP services.

Here's my take on all of this:

Powell is right that VoIP providers feel the need to enable 9-1-1. I think they will eventually all get on board if only for market acceptance reasons.

What is needed is some sort of standardization push, an acceleration of the timetable to make it happen, and a pre-emptive strike against inconsistencies that would inevitably occur if competing VoIP providers were left to their own devices.

And as for taxes,sure, VoIP is Internet-based, and is not a local service. I don't pay separate local taxes for my Internet service. But local jurisdictions, many of whom are hungry for revenue,smell a cash cow here.

Just today, I have read a letter that one such jurisdiction sent a VoIP services provider. They base almost their entire argument on the provisions of their Utility Users Tax, or UUT. Apparently, Internet access is included in the UUT's definition of communications services, and thus is taxable.

But to that, I say that just because you call a service "taxable" does not mean that the legal or technical reason for calling it that holds water.

We'll be tracking this battleground, and reading your comments.