Two D.C. councilmembers are trying to exempt voice over Internet protocol service, or VoIP, from a type of regulation in hopes of encouraging service providers to expand their infrastructure in the city.
There is an ongoing debate over whether VoIP should be regulated as telecommunications service or as an information service — a distinction important to companies making business decisions, as telecommunications services fall under both federal and state regulation, while information services are regulated only by the FCC.
Councilmembers Mary Cheh and Kwame Brown introduced legislation that would prohibit District telecommunications regulation of VoIP and Internet protocol-enabled service. At present, VoIP service is not regulated by the District, but only because there hasn’t been an outcry for oversight, according to Council staff. The bill would solidify the District’s current position.
“We would be joining with many neighboring states in providing regulatory certainty and clarity to industry,” Cheh said in a statement, “thereby creating a stable environment for increased competition and improved services.”
Service providers back the bill strongly.
“Any time a jurisdiction recognizes that the market should dictate the offering of services as opposed to government regulations, we view that as positive,” said Joseph Askew, vice president of government relations for Verizon. “It encourages innovative technologies.”
But the possible exemption of VoIP from telecom District regulations leaves a few questions unanswered, particularly surrounding the possibility of Verizon’s FiOS technology entering the District.
Verizon currently offers a VoIP service called Voice Wing. Verizon’s FiOS system will also offer voice service, and whether it will technically be considered VoIP for purposes of the exemption is unknown. The D.C. Public Services Commission hasn’t made an official decision over whether it will be able to regulate FiOS in the same way that it regulates landline phone service providers. At the present, FiOS has not entered the District, and no formal announcements have been made.
FiOS technology uses fiber optics, replacing copper wires used for phone landlines upon customer request in a given service area. Television and Internet services are offered over the same fiber optic lines.
While fees for wire-line phone services are regulated VoIP service providers will not be required to charge a certain price. At this point it’s unclear whether the voice part of FiOS service would also be exempt from price regulations. But there is already a presence of unregulated VoIP providers such as Vonage in the District, and the marketplace would dictate the prices, according to Council staff and service provider representatives.
If customers want to keep the landline service, they can, and Verizon also offers DSL Internet through thecopper wires. It is too early to tell how long the copper wires will be maintained for purposes of Internet service, but Verizon spokesperson Harry Mitchell said that it is “in our best interest to provide service,” and pointed out that the company “serves a majority of our customers over copper wires, and will continue to do so for many years.” If someone who has switched over to FiOS wants to switch back to copper wires, Verizon will install the wires at no cost to the customer, according to Mitchell.
One of the primary benefits of a landline — having a phone connection during a power outage — will be duplicated, with a battery backup lasting up to 8 hours with FiOS.
Speculation that the absence of District regulations could lead to redlining, or excluding certain areas from service (something explicitly forbidden for landline phone service), doesn’t “make business sense” and has been “blown away” by market forces, said Mitchell.
VoIP exemptions appear to be part of a national trend.
“At this point, the states are conceding that the FCC is exerting broad jurisdiction…. as long as the FCC continues to impose what it considers to be social obligations and public safety, it is less likely that the state commissions are going to feel the need to regulate VoIP,” said Glenn Richards, a partner in the communications law group at the Washington office of Pillsbury Winthrop Shaw Pittman LLP.
The VoIP exemption bill was introduced shortly before the Council broke for recess. A hearing may be scheduled for the fall. At introduction, there seemed to be a fair amount of support, with three co-sponsors in addition to Cheh and Brown who introduced the bill.
