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Telcos complain about Web phones

A trade association representing 130 providers of telecommunications services has filed a petition with the Federal Communications Commission to halt the sale of Web phones that let voice traffic travel over the Net.

In an effort to stall potential competition before it starts, a trade association representing 130 providers of telecommunications services, has filed a petition with the Federal Communications Commission (FCC) to halt the sale of Web phones that let voice traffic travel over the Net.

With its petition, the America's Carriers Telecommunication Association (ACTA) is targeting Quarterdeck's WebTalk, Vocaltec's Internet Phone, and other Internet telephony packages. This new breed of applications lets users make long-distance phone calls over the Internet for the cost of a local call to an Internet service provider.

The ACTA, whose ranks are packed mostly with smaller resellers of long-distance phone service, fears that that Internet telephony will undermine the market for its members' services as broadband Net communication becomes more commonplace, said Daniel Briere, president of TeleChoice, a telecommunications consultancy in Verona, New Jersey.

"Quite frankly, the Internet telephony people are on a collision course with the telcos," he said. "Over a 14.4 modem, [Internet telephony] is not the greatest quality. But with ADSL and cable modems, that will automatically change. To place a telephone call over that, you can have tremendous quality."

The ACTA has asked the FCC to "exercise jurisdiction over the use of the Internet for unregulated interstate and international telecommunications services." Long-distance carriers have to file for FCC licenses and pay tariffs before they are allowed to offer phone service; Internet service providers don't because users connect to local servers.

Telecommunications analysts think that any regulatory challenges to Internet telephony are unlikely to succeed.

"How are you going to regulate [Internet protocol] traffic?" Briere said. "Are you going to ban IRC? I don't think there will be legislative support."

For the moment, Internet telephony is more hamstrung by bandwidth and standards issues than regulatory challenges. For example, none of the Internet telephones on the market today interoperate with one another.

FCC officials had no comment on the ACTA's petition.

For a review of 12 Web phones, go to CNET reviews.