VoIP ProceedingsOBF #91

Thomas GoodeATIS Attorney

July 2005

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The Classification of VoIP Services Will Determine Regulatory Obligations

• The Communications Act classifies services as “telecommunications services” or “information services”– Telecom carriers provide “telecommunications services:”

The offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

– Information services are not telecom services: The offering of a capability for generating, acquiring, storing, transforming,

processing, retrieving, utilizing, or making available information via telecommunications...

– Cable services: (A) the one-way transmission to subscribers of (i) video programming, or (ii) other

programming service, and (B) subscriber interaction, if any, which is required for the selection or use of such video programming …

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The Classification of VoIP Services Will Determine Regulatory Obligations

•What are the implications of these classifications?-Telecom carriers:

» Subject to common carrier obligations, including interconnection, USF contributions, disability access, and privacy of subscriber information

-Information services: » Generally less regulated than telecom services

-Cable services: » Subject to other restrictions/obligations (including potential regulation by local franchise authorities)

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VoIP Regulatory Classification

• AT&T’s Phone-to-Phone IP Telephony Services (WC Docket No. 02-361)– AT&T’s phone-to-phone IP service (using ordinary CPE, no IP

conversion, originating and terminating on PSTN) is “telecom” service

• pulver.com Free World Dialup– pulver.com’s VoIP service (peer-to-peer communications) is information

service

• Vonage Holdings (WC Docket No. 03-211)– Vonage’s IP-enabled service is “fundamentally” different than traditional

telephone services -- uses specialized customer premises equipment, requires underlying broadband connection, telephone number not tied to geographic location, etc.

– State authority over VoIP services is preempted by FCC

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VoIP Regulatory Classification• IP–Enabled Services (WC Docket No. 04-36)

– NPRM released March 10, 2004:• “IP-enabled services” includes services and applications relying on the

Internet Protocol family• How/if the FCC should differentiate among various IP-enabled services:

– Functional equivalence to traditional telephony– Substitutability– Interconnection with the PSTN and Use of the North American Numbering

Plan– Peer-to-Peer Communications vs. Network Services– Facility Layer vs. Protocol Layer vs. Application Layer

• How should IP-enabled services be classified– Telecommunications vs. information service

• Should state regulation be preempted?

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VoIP Regulatory Classification

• IP–Enabled Services (WC Docket No. 04-36)– NPRM:

• Should IP-enabled services be subjected to same regulatory treatment that would otherwise accompany its statutory classification?

• To what extent should access charges apply to IP-enabled services?• What are the USF obligations of facilities- or non-facilities-based IP

providers?• Should customer proprietary network information (CPNI) requirements

and other consumer protections be afforded to subscribers of IP-enabled services?

• Also dealt with E911 issues pertaining to IP enabled services.

– This decision has been “on-hold” pending outcome of Brand X case

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VoIP Regulatory Classification• FCC v. Brand X Internet Services

– In case brought by ISP denied access to broadband cable lines, US Supreme Court affirms 2002 Declaratory Ruling by the FCC that broadband internet service is information service and not a telecom service (or a cable service)

• Internet access allows users to manipulate and store information; transmission integrated with information processing capabilities of internet access

• US Court of Appeals had overturned the FCC decision, relying on a court decision that held cable modem service was a telecommunications service

– Supreme Court found that the lower court failed to provide proper deference to expert agency’s decision

• Communications Act does not unambiguously define cable modem service as telecom service, so FCC’s interpretation was entitled to deference

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VoIP Regulatory Classification• Advanced Internet Communications Services Act of 2005

(H.R. 214)– Introduced January 4, 2005– Classifies “advanced internet service” as:

• an interstate service• neither “telecommunications” nor an “information service”

– Prohibits the states or the FCC from regulating rates, conditions of advanced internet services

– Provides FCC with exclusive jurisdiction regarding advanced internet services; requires issuance of rules within 180 days to:

• Ensure availability of appropriate E-911 services• Provide access by persons with disabilities• Require contributions to USF• Ensure just compensation for use of PSTN

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VoIP E911 Requirements• IP–Enabled Services (WC Docket No. 04-36, WC Docket No.

05-196)

– June 3, 2005, First Report and Order (R&O) and NPRM– First R&O:

• Imposes E911 obligations on “interconnected VoIP services”– Enables real-time, two-way voice communications– Requires a broadband connection– Requires IP-compatible CPE– Permits origination and termination of calls on the PSTN

• No determination of regulatory classification (information vs. telecommunications services), but regardless of classification FCC has “ancillary jurisdiction” to adopt E911 requirements for VoIP

– Interconnected VOIP services are interstate in nature (subject to FCC jurisdiction)

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VoIP E911 Requirements• IP–Enabled Services (WC Docket No. 04-36, WC Docket No. 05-196)

– First R&O:• Within 120 days (November 28), interconnected VoIP providers must:

– Provide E911 service to customers via wireline E911 network» If location cannot be determined automatically, customers must provide location information

– Submit letter to FCC detailing their compliance with E911 rules• By effective date (July 29), providers must notify new and existing customers of limitations of

E911 availability• No exemption from liability for E911 services under state law (unlike wireline/wireless carriers)• The FCC will adopt a future order for portable interconnected VoIP services that will include a

method for determining geographic location without customer assistance

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VoIP E911 Requirements• IP–Enabled Services (WC Docket No. 04-36, WC Docket No.

05-196)– In the NPRM, the FCC seeks comment on:

• Whether to extend the E911 requirements to non-interconnected VoIP providers

• How can the FCC facilitate the identification of the geographic location of VoIP users?

• Should performance standards be established for updates of Registered Location information?

• Should more restrictive notification or reporting obligations be imposed?• Should customer privacy protections be adopted?

– Comments due August 15; reply comments September 12

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VoIP E911 Requirements• H.R. 2418, S.1063 -- IP-Enabled Voice Communications

and Public Safety Act of 2005– Introduced May 18, 2005– Requires the FCC to prescribe regulations for E911 access to VoIP

services– Entities with ownership/control of emergency services infrastructure

must provide any requesting IP-enabled service provider with nondiscriminatory access to facilities necessary for delivery of 911 calls

• Access must be consistent with industry standards– Provides immunity for provision of E911 services by VoIP providers– NTIA to report to Congress on a national plan for migrating to a

national IP-enabled emergency network, including benefits, costs and proposed timetable

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VoIP Numbering Resources• SBC Internet Services Numbering Petition (CC

Docket No. 99-200)– February 1, 2005, Order granting SBCIS permission to obtain

numbering resources directly from NANPA, requesting NANC to review rules to allow IP-enabled service providers access to numbering resources

• Previously, IP service providers were required to get numbers through LECs

– Similar petitions have been filed by other parties (including: Vonage, VoEx, Qwest, CoreComm-Voyager, Net-2-Phone, Wiltel Communications, Constant Touch Communications)

– July 15, 2005, NANC Future of Numbering Working Group Report• Recommends imposition of same rights (access to numbers) and

responsibilities (including cost contributions) on all providers

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VoIP CALEA Requirements• August 9, 2004, NPRM, Declaratory Ruling, ET Docket No. 04-295

– Seeks comment on CALEA obligations for VoIP services:• CALEA obligations apply to “telecommunications carriers”

– CALEA definition of “telecommunications carrier” differs from that in the Communications Act and, although it excludes information services, it includes service that is a replacement for a substantial portion of the local telephone service

– FCC is not determining classification of VoIP services • Defines “broadband” as facilities-based internet access at more than 200

kbps downstream• “Facilities” include circuit-based switches, routers, softswitches and other

equipment with addressing and intelligence functions• Providers of “managed” VoIP services are subject to CALEA

– Declaratory Ruling:• Commercial wireless “push to talk” services subject to CALEA

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VoIP Related Proceedings• Brand X Decision has renewed interest in alternative access

technologies, including Broadband Over Powerline (BPL)– October 14, 2004, Report and Order established new rules for

mitigation requirements for BPL systems, ET Docket 04-37• BPL systems provide high speed digital communications by

coupling RF energy onto either the power lines inside a building (“In-House BPL”) or onto the medium voltage power delivery lines (“Access BPL”)

• Most Access BPL systems operate in the range from 2 to 50 MHz• BPL systems must be able to mitigate potential interference,

including frequency avoidance and shutdown capabilities• Regulatory classification of BPL services will depend on nature of

specific services offered

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VoIP Related Proceedings• BellSouth Request for DSL Ruling (WC Docket No. 03-251)

– March 25, 2005, Memorandum Opinion & Order (MO&O), Notice of Inquiry examines state regulation of DSL service

– In the MO&O, the FCC: • Prohibits states from requiring incumbent LECs to provide DSL service to end-users

over the same unbundled network element that a competitive LEC uses to provide voice services to end-users

• Does not address issues pertaining to categorization of DSL service (whether it is an interstate service or information service), CALEA obligations for DSL services, etc.

– In the NOI, the FCC:• Seeks comment on whether the practice of tying (bundling) is harmful to competition

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VoIP Related Proceedings

• Unified Intercarrier Compensation (CC Docket No. 01-92)– March 3, 2005, FNPRM:

• Seeks comment on plans filed by various parties to replace the existing intercarrier compensation regime

• FCC’s goals: establish a unified regime to promote economic efficiency, preserve universal service, maintain competitive and technological neutrality

• Will likely affect how VoIP providers are compensated or must provide compensation

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VoIP Related Proceedings• Madison River Communication LLC

– In response to a complaint that Madison, a DSL provider, was blocking VoIP carrier transmissions, the FCC launched an investigation:

• The FCC issued a Letter of Inquiry into allegations on February 11, 2005, that Madison was blocking ports used for VoIP applications, thereby affecting customers’ ability to use VoIP through one or more VoIP service providers

– Consent decree entered into on March 3, 2005:• Madison agrees not to block ports used for VoIP applications or to

otherwise prevent customers from using VoIP applications• Madison will pay US Treasury $15,000

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VoIP Related Proceedings• H.R. 1479, Rural Access to Broadband Act

– Introduced April 5, 2005– Establishes Rural Broadband Office within Dept of Commerce– Within 1 year, the Rural Broadband Office will submit a report to Congress on

availability of and access to broadband technology in rural areas• Report will set forth a strategic plan to meet demand for such services

– Directs National Science Foundation to research ways to enhance:• Availability of broadband telecom services in rural areas• Access to the Internet through broadband telecom services

– Revises Internal Revenue Code to deduct costs of qualified broadband expenditures

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Questions?

• If you have any questions regarding these matters, please do not hesitate to contact:

Thomas GoodeAttorneytgoode@atis.org(202) 434-8830