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FCC pressed on Net phones

A coalition will ask the Federal Communications Commission to make up its mind on a proposal to ban Internet telephony.

A group of Internet telephone advocates today will ask the Federal Communications Commission to make up its mind on a proposal to ban voice communications over the Internet.

As previously reported by CNET, the Voice on the Net Coalition will petition the FCC to deny a ten-month old request by America's Carriers Telecommunication Association to ban Internet telephones. The Voice on the Net group, which includes Microsoft and VocalTec, is frustrated by what it sees as governmental inaction on ACTA's original petition, VON coalition chairman Jeff Pulver said.

"I respect the fact that it takes the government time to make decisions," Pulver said. "Now, I'm asking the government to work at Net speed. After ten months, I'd like a decision."

Pulver said he is concerned that the Internet telephone market could stall if the FCC doesn?t make a decision on the ACTA petition. "The future of the growth of this market that is at stake here," he said. "By having clouds of uncertainty hang over Internet telephony, would-be investors are holding back."

ACTA, a trade organization of phone companies, originally made its bid to stop the sale of Internet telephones last May. Net phones such as Microsoft's NetMeeting and VocalTec's Internet Phone allow users to have crackly voice conversations with other Net phone users over the Internet without paying normal long distance fees.

Unlike regular phone calls, use of Internet telephones is not subject to FCC tariffs. ACTA, which includes 130 small to medium-sized telecommunications companies, bitterly opposed the use of Internet telephones because cheap Net calls could, in theory, eventually steal business from them.

Internet telephony advocates freely admit that they want to offer users an alternative to expensive long distance calls, but they argue that, as a new technology, voice communication over the Internet should not and cannot be regulated.

Still, even though the FCC has been slow to take action on the ACTA petition, the agency is unlikely to ban Internet telephones anytime soon. In various speeches, FCC chairman Reed Hundt has echoed the concerns of the VON Coalition and others, suggesting that Net telephones shouldn't be subject to "thoughtless regulation."

For now, the debate over Net telephones may be much ado about nothing. Because of the poor quality of voice conversations over the Net and lack of interoperability among products, the technology doesn't yet approach the popularity of other Internet applications such as Web browsers or email.

Pulver estimated that the market for Internet telephones, which amounted to $10 million in 1996, will grow to between $30 million and $40 million this year--a tiny sliver of the multibillion-dollar telecommunications industry.

But new developments could make Internet telephones easier to use. PictureTel, a leading maker of videoconferencing products, recently announced that it would support an audio compression-decompression (codec) standard called G.723.1. The standard will allow PictureTel's products to engage in phone calls with products from Intel and Microsoft, both of which already support the codec.

Other companies such as Lucent Technologies are also planning gateway products that will connect Net telephones to regular telephone lines. The gateways could also enable users of regular telephones to make calls over the Internet without initiating the call from a PC.