The FCC Begins Process of VoIP Review; Cisco SVP Charlie Giancarlo Discusses Status, Future Outlook
December 4, 2003
The U.S. Federal Communications Commission (FCC) is launching a review of Voice over Internet Protocol (VoIP) to consider how it should be regulated. The review kicked off on December 1 with a public forum to gather information concerning advancements, innovations and regulatory issues related to VoIP services.
Charlie Giancarlo, senior vice president and general manager of product development for Cisco Systems, participated in a panel that addressed technical and market issues surrounding VoIP. Panelists described the technology and capabilities of VoIP, addressed ways the FCC might distinguish among the numerous services employing VoIP and discussed the fact that VoIP will be utilized in conjunction with many other communications applications (such as e-mail, instant messaging and videoconferencing).
About 10 percent of all telephone calls today use the Internet in some way. However, most analysts believe that within a decade nearly every call will use the Internet. So this is a critical issue for government, industry and citizens who rely on advanced technologies for their daily communications.
News@Cisco asked Charlie Giancarlo to provide a brief overview of the current status of efforts to look at VoIP regulations and to share his thoughts on where these efforts will lead.
Why is the FCC reviewing VoIP?
Charlie Giancarlo: In 1998 the FCC concluded that it was too early at that stage to decide how to regulate VoIP. Five years later, VoIP has grown significantly, and the FCC is taking another look - to see if now is a more appropriate time to think about applying regulations.
In addition, Minnesota, Wisconsin and California have taken steps to attempt to regulate VoIP on the state level. Those efforts are driving the FCC to look more closely at a national policy rather than having the individual states create many conflicting state regulations.
Further, the debate has started as to whether VoIP is a telecom service or an information service. Telecom services are regulated at state and federal levels, but data networks have been left largely unregulated and untaxed to help spur growth. Congress and the FCC have drawn a strict division between voice and data networks, but with the rise of VoIP, that distinction is collapsing.
What position does Cisco take on this issue?
Charlie Giancarlo: Cisco believes that VoIP is an information service and Internet application that should not be regulated.
Regulation generally slows technological development, hinders the growth of new industries, and directly impacts business by drawing resources away from revenue generating activities to implementation of new regulatory barriers. For example, if existing, restrictive rules for traditional voice telephony are applied to voice transmissions made over the Internet, we could see a chilling effect on the growth of the Internet and of new IP based communications applications.
As VoIP technology matures, it will increasingly interact with other data and applications to provide a rich customer experience of voice, video and data -- all intertwined. It would be impossible to separate the voice portions from the data portions, and the FCC shouldn't try to do so. Rather, the FCC needs to look at VoIP as a new application and not automatically apply regulations designed for the circuit-switched network to a VoIP service.
Of course, Cisco recognizes that there may be important public interests in VoIP applications - such as access for people with disabilities and to 911 emergency services -, and we recognize that regulators may need to take action in these areas. But those actions should be designed with VoIP technology in mind rather than merely importing similar regulations from the circuit-switched telephony world.
You mentioned that some states are considering VoIP regulations. So, this is a state issue as well?
Charlie Giancarlo: Some states believe that it is. As I mentioned earlier, many state PUCs are beginning to explore whether or not to regulate VoIP, and several have already taken steps to attempt to do so.
We think it would harm the VoIP market to have different rules in different states. We also believe that it's impossible to determine what constitutes intrastate communications and what constitutes interstate communications in VoIP networks; one cannot determine where a call begins or where it is terminated, and one cannot define where the data travels.
Cisco believes there should be one national policy that will allow this developing technology to grow to its full potential.
What are the next steps in this process?
Charlie Giancarlo: It's not completely clear, but we anticipate that, shortly following this forum, the FCC will open a proceeding to investigate all these questions.
Cisco supports the idea of the FCC setting national policies and will actively participate in this effort. We will encourage it to create a minimal regulatory structure that allows VoIP to flourish.
As for timing - I think it could take a year or longer for the FCC to get to that point. This is a process that shouldn't be hurried; the FCC must take the time to examine all the facts and make an informed decision, rather than rush to conclusions about how VoIP should be regulated.