U.S. oversight is urged for Web phone services

WASHINGTON — WASHINGTON - The federal government, not the states, should regulate Internet phone services in order to protect investment and innovation, telecom industry and federal officials told Congress yesterday.

Several state legislatures have enacted laws aimed at the technology called Voice over Internet Protocol (VoIP), which converts voice signals into data packets and transmits it over broadband networks, and at least a half-dozen other legislatures are discussing similar bills.


"This jurisdictional confusion should be ended, as it creates a climate of uncertainty," Margaret Greene, president of regulatory and external affairs for Atlanta-based BellSouth Corp., told the telecommunications and Internet subcommittee of the House Energy and Commerce Committee.

The VoIP Regulatory Freedom Act of 2004, introduced in April by Rep. Charles W. Pickering Jr. of Mississippi, calls for the federal government to regulate the technology.


'Act quickly'

Pickering, a Republican, said federal regulation would promote capital investment and competition, protect consumers, and keep the industry from having to deal with up to 50 separate state laws.

"We need to act quickly because a number of states ... are beginning to regulate," Pickering said. He urged that his legislation be enacted this year rather than including it as part of a complicated revision of the 1996 Telecommunications Act that Congress is expected to begin next year.

The Federal Communications Commission has already received several inquiries from groups bringing VoIP into the market, said Jeffrey Carlisle, senior deputy chief of the agency's Common Carrier Bureau.

"Their plans might be hampered by burdensome and conflicting regulatory requirements that could result as state commissions begin to assert jurisdiction in this area," Carlisle said.

Greene testified that even federal regulation of VoIP should have limits. She told the panel that VoIP services should be regulated for public safety issues, such as providing 911 emergency services and assisting law enforcement, but that the federal government should not regulate them economically.

"The VoIP and broadband markets are widely competitive, making economic regulation of these services and applications inappropriate and unwarranted," Greene testified.

Other witnesses said that states should have a role in regulation.


Insufficient resources

"State commissions are well suited to the watchdog and referee role because they are in the local communities, staffed to be responsive and have unique expertise in the telecom business," said Robert Nelson, a member of the Michigan Public Service Commission.

He said "distant federal agencies" would not have the resources to handle the load of complaints.

VoIP services are becoming more popular because they cost up to 40 percent less than conventional phone services, Greene said.

A Mercer management consulting survey released in mid-June found that up to 30 percent of American homes will subscribe to VoIP by 2007, up from the expected 600,000 total subscribers by the end of this year.