FT Transcript for Feb 25, 2004
More and more consumers are making phone calls that are routed through the Internet rather than existing telephone networks. Internet calls are generally cheaper, but have been less reliable, and often don't sound as good. Governments are concerned they will lose billions of dollars in revenue as consumers abandon heavily regulated and taxed telephone networks. They also want to insure that the Internet telephone industry provides effective 9-1-1 service, and provides law enforcement with wiretapping capabilities.
The Voice Over Internet Coalition, which includes Microsoft, Intel, Texas Instruments and AT&T, has announced a new lobbying campaign designed to fend off government regulation of the burgeoning "voice over IP" industry. The coalition says regulation by Washington and state governments threatens to stifle innovation.
Tom Evslin is chairman and CEO of ITXC, an Internet phone call provider. He chairs the Voice Over Internet Coalition policy committee.
EVSLIN: Telephony regulation was developed in the days when all telephone services were delivered by monopolies. And of course monopolies do have to be properly regulated in the public interest. But voice over IP providers are not monopolies, and in fact the use of voice over IP has made it possible to challenge the old monopolies even when they have a virtual strangle hold on infrastructure. Voice over IP has not been an instrument for monopoly, but an instrument for greater competition. Therefore it's totally inappropriate to extend regulations that were developed in order to control monopolies to this new competitive field.
What do you fear that regulation would do to the industry?
EVSLIN: If we took this obsolete regulation and extended it to voice over IP, we'd slow down the growth. We won't stop it. The benefits are so great that the use of voice over IP will continue to increase rapidly. But there will be a real slowdown in the delivery of those benefits if we take the regulations that were developed for traditional telephony and apply them to these new industries. The ironic result will be that the former monopolies will maintain market share longer than if they were forced to compete.
One of the reasons people have said voice over IP needs to be regulated is that they're afraid that otherwise voice over IP won't support 9-1-1 services. In fact, voice over IP can and will voluntarily support 9-1-1 in ways that are much better than traditional telephony. We can do that because we can integrate voice with all of the other data that is available on the Internet. If we were to get rigid regulation, what we'll end up doing is having to emulate the less capable, traditional telephone system when we implement services like 9-1-1 or disabled access.