With E911 deadline past, what's next for VoIP firms?

At this point no one really knows. Officials at the Federal Communications Commission say they're still reviewing documents that were filed by voice over Internet Protocol, or VoIP, providers before a 12:01 a.m. Tuesday deadline. That means it's impossible to say for certain how many VoIP companies are in compliance with the mandate.

So far, the FCC hasn't taken action against specific companies. For the time being, the Internet telephony industry is in a kind of limbo. Companies such as Vonage and 8x8 say they plan to continue marketing to prospective customers and signing them up for their service, but in doing so the companies risk racking up heavy fines.

"I don't know what the next step is," said Bryan Martin, president and CEO of 8x8. "This is the final filing since the FCC issued its mandate 120 days ago. We had a collective sigh of relief the other day after we filed, but now we don't know what comes next or how the FCC will react to our filing."

In May the FCC issued a mandate requiring all voice over IP providers to comply, within 120 days, with enhanced 911 services that automatically provide a caller's location and telephone number.

The FCC told VoIP operators that if they didn't comply with the rule by the deadline they would be forced to stop offering service to customers. But earlier this month, amid complaints from the industry, the FCC revised its position. Instead of being shut down, VoIP providers that don't comply will be unable to market their services to new customers in areas where E911 isn't yet available.

It's unclear what the FCC will do next. Some experts believe it will not strictly enforce the mandate, so long as VoIP companies are making progress.

"Normally there could be fees associated with noncompliance," said Maribel Lopez, a vice president at Forrester Research. "But I think there might be some leniency. It was an incredibly short deadline to begin with, and given the fact that the (much older) wireless industry is still filing for extensions, it doesn't seem like they could impose stiff penalties."

Technical riddles
The level of compliance varies. Vonage, the best known VoIP provider, claims that 90 percent of its customers can connect to the routers in the E911 network, but not all of these connections have been fully tested, according to a letter filed with the FCC.

Vonage officials said about 26 percent of its customers can access local E911 networks that have been fully tested. The company expects to boost that figure to 67 percent in the next 30 days, and Vonage executives expect to reach 97 percent of their customers with fully tested E911 service by the middle of next year.

Vonage blames its lack of compliance on tricky technical issues and resistance company officials claim they've faced from some traditional phone companies.

In a Nov. 14 letter to FCC chairman Kevin Martin, Jeffrey Citron, CEO of Vonage, accused Qwest Communications of not fully cooperating with Vonage's efforts to identify "dummy numbers," or unassigned phone numbers, that can be used to link out-of-area phone numbers to a local E911 operator.

The current E911 system works by associating a given phone number with a geographic area. But calls are rejected from numbers that don't match a particular region. For example, if a Vonage customer with a 212 area code, which indicates New York City, moves to Los Angeles and calls 911, the existing E911 system rejects the call because it doesn't match the 310 area code used in Los Angeles.

To circumvent this problem, VoIP providers access local phone numbers that can be temporarily assigned to dial into the E911 networks' local routers. This fools the router into thinking the call has been made locally.

But to ensure 911 callers get an operator instead of a busy signal, a VoIP service provider needs to make sure the local phone number it has selected is not already in use. Since the Bell phone companies have access to the largest pool of these numbers, it's important for them to cooperate with VoIP operators, say Vonage officials.

In his letter to the FCC, Citron commended Verizon Communications for being the only local phone company to fully cooperate with its efforts. He singled out Qwest as a company that has dragged its feet.

Qwest disputes the claim.

"Qwest doesn't own these numbers, so it's not appropriate for us to hand these out to other providers," said Claire Mylott, a spokeswoman for the company. Qwest executives say the company has been working with local authorities that assign the numbers. Qwest also says it's working with Congress to draft a proposal the FCC can use in appointing a third party to administer and manage the numbers.

Traditional E911 vs. alternatives
Another Net phone provider, 8x8, says about 14 percent of its customers are connected to the traditional E911 system. But the company claims all its customers can be connected indirectly to an E911 operator through a national call center it has set up. When an 8x8 customer who's not connected to the traditional E911 network dials 911, the call goes to 8x8's national call center. The caller's address and phone number pops up on an operator's screen, and that operator then contacts others in the appropriate Public Safety Answering Point, or PSAP.

Even though this solution doesn't officially comply with the FCC's mandate, 8x8's CEO hopes it will suffice until the company is able to finish testing links into every local PSAP.

"Right now we're trying to educate the FCC on what we're doing," said Martin. "We hope to get some clarification on whether or not they view us as being compliant."

But some Net telephony providers, such as VoicePulse, have not complied at all with the FCC mandate. VoicePulse said in its report to the FCC that it's still negotiating a deal with Intrado, a third-party provider of 911 services. VoicePulse expects to have the necessary testing completed and a deal finalized in January 2006.

Focus on the VoIP 911 issue increased in late 2004, following a string of incidents in which VoIP subscribers couldn't get through to emergency services. But some VoIP supporters believe the Net telephony industry has been unfairly singled out, especially considering the number of wireless and wireline telephone customers who still don't have access to E911 services.

The wireless industry has been working on this problem since 1994, but it still can provide only about half the United States with E911 service, according to Jim Kohlenberger, executive director of The VON Coalition, a VoIP industry group. And on the traditional, wireline side of the business, out of 138 million wireline phone customers in the U.S., 1.5 million still don't have access to E911 service. In total, only about 2.5 million to 3 million households even subscribe to VoIP.

"The VoIP players have quickly stepped up to the plate on this issue," Kohlenberger said. "But if the FCC strictly enforces this mandate and doesn't allow companies to continue marketing their service, it could create a new barrier to accelerating E911 deployment."