VoIP is basically the transport of telephone calls over an internet connection. For a company that already pays for a broadband connection, long distance calls can become free of charge, albeit VoIP handsets tend to be much more expensive than standard handsets.
The technology has the added attraction of being tax free, given that internet access taxes are presently forbidden in the US. However, cash-strapped US states, concerned at losing revenue previously provided by highly taxed telephone calls, are calling for VoIP calls to be regulated and taxed.
The FBI is also concerned that VoIP offers terrorists a low risk means of communicating, as the structure for phone tapping and surveillance is less easy to implement.
The industry says that VoIP is completely different in substance and structure to traditional telephone services. These were originally created by monopoly organisations and, they argue, required regulation in order to facilitate competition.
VoIP is controlled and implemented by many different organisations, competing against each other, say proponents. Regulation is therefore not required and if introduced, would stifle the innovative nature of the technology.
The FCC held a VoIP forum on Monday to hear from all sides. It indicated that it favoured a light touch in dealing with the new technology.
FCC Chairman Michael Powell said, in opening the forum, "I would say from the outset and I think most people would agree that moving more communications to IP is in the public interest".
"In my view, the policy environment must begin with the recognition that the internet is inherently a global network that does not acknowledge narrow, artificial boundaries," he added, saying he would prefer VoIP to "evolve in a regulation-free zone."
The FCC has launched the Internet Policy Working Group to consider what regulations are necessary, if any. No date has been set for publication of its findings.