VoIP Regulation at Heart of FCCs Upcoming Meeting

Jeff Pulver could be all smiles come Thursday.

That is when the FCC is expected to rule on a request that the Internet phone service he launched in November 2002 — Free World Dialup — is not subject to a vast web of telecom rules.

During a Feb. 12 meeting at FCC headquarters, the federal regulator also is likely to open a notice of proposed rulemaking (NPRM) concerning how to treat Internet Protocol services, including voice over IP (VoIP). An NPRM outlines FCC objectives, may include tentative regulatory proposals and solicits public comment on new rules.

Analysts view a broad rulemaking as necessary to create certainty in the market and possibly help encourage an investment boon in VoIP.

On Thursday FCC commissioners also are scheduled to vote on NPRMs related to access charge and universal service fund reforms, and broadband over power line systems. The industry is unsure how new technologies, including VoIP, will contribute to the multi-billion dollar Universal Service Fund earmarked to fund telecom service in schools, libraries and rural areas. Separately, telecommunications carriers have been disputing their obligations to pay local phone companies access charges when IP phone traffic meets the public switched telephone network (PSTN). The FCC meeting is scheduled to begin 9:30 a.m. EST.

FCC Chairman Michael Powell has emphasized his desire to apply light regulation to Internet-based phone service.

Pulver argues Free World Dialup should not be subject to old telecom rules because the phone calls are routed entirely over the Internet. The calls never touch the PSTN controlled by the regional Bells and other local phone companies. That, alone, distinguishes the service from other broadband phone providers, such as Vonage Holdings Corp. Free World Dialup subscribers must have special equipment and a broadband connection in order to chat with fellow members over the Net for free.

It is not for certain the FCC will grant Pulvers request. Federal authorities are concerned about their ability to wiretap calls over the Internet. Last month FBC Deputy General Counsel Patrick Kelly sent the FCC a letter, asking the regulator to first issue rules specifying what carriers must comply with the Communications Assistance for Law Enforcement Act of 1994 (CALEA) before addressing other broadband proceedings. The Department of Justice, FBI and Drug Enforcement Administration planned to file a petition seeking rules within the next several weeks, according to the letter.

However, a Justice Department official sent the FCC a subsequent letter, reversing the agencys position, according to an article published today in The New York Times. "While it would obviously be our preference that the F.C.C. decide these issues prior to considering other broadband proceedings, we recognize that this is not practical, and have no desire to prevent the F.C.C. from doing its work, the Times quoted Justice Department Deputy Assistant Attorney General John G. Malcolm.