Beating a familiar drum, the Clinton
today warned the Federal
not to go down the path toward Net regulation
in an anticipated report to Congress
reported, the FCC is considering whether companies that deliver
voice-to-voice calls over the Net should be reclassified as long distance
The FCC was asked by Congress to clarify which communications
companies have to pay into the nation's universal service fund, which helps
subsidize phone service for rural and low-income U.S. consumers and Net
access for schools and libraries.
Based on various plans being mulled over by FCC staff, the five-person
commission could declare that domestic Net telephony companies are no
different from long distance providers and should be required to pay into
the universal service fund through access charges collected by local phone
Net telephony firms that switch international calls to the
United States say they already pay the charge.
But the White House is calling on the FCC to steer clear of any definition
changes that officials worry could stifle the Net's commercial growth. For
now, the Net telephony market is booming, with numerous firms rolling out services that utilize Internet protocol (IP),
allowing consumers to make voice calls from traditional phones or with
their computers using special software.
"While legitimate issues have been raised regarding the obligations of new
players to contribute to universal service, any proposal to regulate
Internet telephony as a 'telecommunication service' would raise contentious
issues, resolution of which would have international, as well as domestic,
repercussions," Larry Irving, head of the Commerce Department's National
Telecommunications and Information Administration, stated today in a
letter to FCC Chairman William Kennard.
"Thus, the administration urges the Commission not to change its current
approach," he added. "The administration is prepared to work with
Congress, the Commission, industry, and all other stakeholders to ensure
that universal service goals are met. However, we must be careful not to
thwart the development of an innovation that promises consumers the very
kind of competitive alternative that the 1996 [Telecommunications] Act was intended to
In September, Irving also said the federal government should not regulate
telephone calls over the Net. His letter reiterates the administration's
ongoing position that Net services should be allowed to flourish and should not be hit
with new taxes or regulations.