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FCC hints at support for Net phones

A speech by the FCC may indicate bad news for telcos opposing Internet telephony.

Telephone companies that want the Federal Communications Commission to ban Internet telephones may be in trouble, judging by a recent speech given at the INET '96 conference in Montreal.

FCC chief of staff Blair Levin gave the speech on behalf of Reed Hundt, chairman of the agency. The text is sprinkled with anecdotes about trains, Jimi Hendrix and Microsoft co-founder Paul Allen, but his remarks on the possibility of regulating Internet telephony are of the most concern to America's Carriers Telecommunications Association, the trade organization that filed a petition with the FCC requesting regulation of the emerging Internet telephone market.

Citing the need to "unwrite written rules and undo unwritten rules that inhibit competition," Hundt wrote, "I am...strongly inclined to believe that the right answer at this time is not to place restrictions on software providers or to subject Internet telephony to the same rules that apply to conventional circuit-switched voice carriers."

"On the Internet, voice traffic is just a particular kind of data, and imposing traditional regulatory divisions on that data is both counterproductive and futile," he said. Even if the agency had the technical means to regulate this fast-developing industry, the chairman added, "I can't imagine that we would have the time to keep track of all the bits passing over the Internet to separate the acceptable data packets from the unacceptable voice packets."

In March, the America's Carriers Telecommunications Association, which represents smaller long-distance companies, filed a petition before FCC asking that the sale of online telephony software be banned and that the Internet be regulated as a telecommunications service.

But VocalTec, VDOnet, and other telephony software companies quickly formed the VON Coalition to oppose the petition. Apparently, their work has paid off, which pleases Robin Rednor, vice president of sales and marketing at Netspeak.

"I think this is an intelligent and insightful move on his part. It's also the only realistic thing he could do...because we felt the American government wouldn't regulate Internet telephony before they had a better understanding of where telephony is going," she said. "Not only that, but the Internet is a global entity, and for any branch of the American government to try and do something like that would be a bit pompous."

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Telcos complain about Web phones