IP telephony, also known as VoIP or Voice over Internet Protocol, 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 that 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 FCC is therefore investigating the growth of VoIP, and yesterday announced that it was seeking public comment on various issues based on the premise that internet services should remain largely free of regulatory burdens and that it should apply regulatory requirements only where needed.
Additionally, the FCC announced an investigation into the technical issues associated with law-enforcement access to VoIP services. The FBI, for one, has expressed concern that VoIP offers terrorists a low risk means of communicating, as the structure for phone tapping and surveillance is less easy to implement.
The FCC has, over the past few years, received petitions from particular VoIP providers, asking for confirmation that they are not subject to the usual telephone service rules.
One such petition was filed last year by Pulver.com, and yesterday the FCC issued its verdict on the petition, declaring that the service, known as Free World Dialup, should be an unregulated information service subject to federal jurisdiction. The service allows access over the internet to other members of the service, free of charge.
FCC Chairman Michael Powell said, "This is in no way different than e-mail and other peer-to-peer applications blossoming on the internet". He added, "Such services have never been held to be telecom services".
But the FCC warned that the ruling would not apply to all VoIP providers. "Where these applications become more complicated, or more traditional, or they touch public-switched networks, they present even more complications," Powell told CNET News.
Edward E Whitacre Jr, Chairman and CEO of VoIP provider SBC Communications welcomed the news, saying:
"By beginning the inquiry on the appropriate framework and approving the Pulver petition, the FCC also provided relief for the entire industry that was facing the balkanization of rules and procedures. We hope that state commissions will now set aside potential IP proceedings and begin working with the FCC on building the kind of environment that will nurture this technology".