Oversimplified history and dilemma of telecoms

Posted on December 23, 2013  /  0 Comments

I am a fan of Mitchell Lazarus. This engineer-cum-lawyer, who is also a PhD in psychology, has brilliantly narrated the evolution of PSTN. He believes that regulating IP telephony is as challenging as “updating the rules of the road from horse-and-carriage traffic to modern automobiles.” It’s all about regulating the interconnected and non-interconnected VoIP services.

There used to be a marked difference between the two: where interconnected VoIP needed no special skills, the typical non-interconnected VoIP customer was a highly computer-literate person with a headset plugged into a laptop. But then smartphones appeared. They combined the functions of both the headset and the laptop, while VoIP apps eliminated the need for computer skills. A lot of the people chatting on their phones at Starbucks may well be using VoIP. Many of the apps can dial out to any phone number. But because they have no number themselves for dialing in, they are deemed non-interconnected, and hence are mostly unregulated. Sooner or later, the providers will work out ways for their customers to call each other without using phone numbers at all. Regulatory efforts that continue to ignore these apps and their providers will miss a large piece of the industry. That will put more of the regulatory burden on interconnected VoIP, which will drive still more users to the non-interconnected apps.

If the FCC wanted to, could it apply full telephone regulation to the non-interconnected providers? Its statutory mandate does not obviously extend that far. Besides, providers could easily locate off-shore, outside the FCC’s reach. And even just identifying the myriad of providers and their untold numbers of customers could be a formidable task. Not many people think that completely unregulated telephone service is the right outcome, but we may be heading in that direction at accelerating speeds.

Full article of Mitchell Lazarus.

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