VoIP still needs breathing room

In recent weeks, the prospect of Americans using high-speed broadband connections to make phone calls over the Internet has created a palpable buzz in tech circles.

Battered telecommunications companies see the potential for large new markets, technologists see the potential to deliver innovative new services, and consumers see the potential for vast improvements in how they communicate.

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So with all this good news, why are federal regulators poised to play Scrooge this holiday season and tie this promising technology in red tape?

Recently, the Federal Communications Commission held a forum to discuss how Internet calling should be regulated. This is a prelude to what the agency calls a "notice of public rule making," which is its usual first step to new regulation--in this case, possible regulation of the Internet.

Officially, the FCC says it is just taking these actions to "gather public comment on the appropriate regulatory environment" for Internet calling.

The FCC seems to be rushing to judgment.

Forgive me for being skeptical, but there is just too much potential at stake.

One person who does not have the slightest doubt that the FCC is ready to begin choking this promising technology in federal regulation is Reed Hundt, the commission's former chairman. Earlier this month, speaking to a convention of wireless Internet users, he issued a stark warning that the federal government had Internet calling in its sight. "I ran this agency," Hundt said. "I know you should be suspicious."

Specifically, Hundt said recent statements from the FCC indicate that Monday's hearing will be mostly a formality and that the decision had already been made to begin regulating. Such a move, he said, would stifle innovation, boost costs to consumers and protect the traditional phone companies from the technological advances low-cost or free Internet calling services create.

The FCC seems to be rushing to judgment. FCC Chairman Michael Powell recently said the commission will waive the usual public-comment period after the hearing.

A move to bring Internet calling under state or federal phone regulations makes no sense.

Powell wrote to Senator Ron Wyden and indicated that the rule-making discussions will commence "shortly after the hearing" on Dec. 1.

As someone who has enthusiastically watched the emergence of Internet communications, it is incredibly disappointing and dismaying to me that the federal government--or states, for that matter--would even consider applying traditional phone regulations to any type of Internet communications at this early stage. Instead, they should reaffirm the longstanding U.S. policy of keeping information and Internet services unregulated--especially as technologies mature and broader phone policies are reformed.

A move to bring Internet calling under state or federal phone regulations makes no sense. Despite the significant buzz Internet telephony is creating, it's still unproven on a mass-market scale, and it's still just an emerging technology in terms of the types of innovation in communications that may eventually emerge.

If the FCC does decide to move ahead with regulating voice over Internet Protocol (VoIP), it may do so on an incremental basis. Instead of creating one massive new set of regulations and taxes on all Internet voice calls, the commission will probably start small and build up--opening the door to broader regulation of the Internet. That's why it's so important to stop any type of Internet communication regulation--before the regulators gain a toehold in regulating the Internet.

The Internet has succeeded in large part precisely because government regulators have agreed to hold off on regulation. That has allowed promising technologies to flourish--or fail--on their own. The FCC owes it to consumers to continue that policy when it comes to something with as much unfulfilled potential as Internet voice communication.