911 For Deregulation

by on May 23, 2005

In its biggest decision since new chairman Kevin Martin took over, the FCC voted last week to impose federal regulation on Internet telephone service. Specifically, the Commission required VoIP providers to provide 911 connections as a standard feature of their service within 120 days. The decision was not surprising, and is something consumers were demanding in any case. For that reason fellow Techliberation blogger Tim Lee gave the decision positive marks. I’m less sanguine. Not only may the decision chill some competition in VoIP markets, but–perhaps more important–the extent of the ruling doesn’t bode well for the new chairman’s commitment to minimal regulation of new technologies.

911 service is, of course, a good thing. Personally, I haven’t signed up for VoIP at home because of the lack of full 911 access. Millions of other consumers feel the same way. As a result, VoIP providers have every reason in the world to provide 911 as soon as possible. It is simply in their own economic interest. Regulation is not necessary for them to realize that. The FCC, however, ordered that service be provided within 120 days–even though many providers say the technical means of doing that just doesn’t exist yet. (The problem is locating an individual when there phone number is like an e-mail address, and not tied to any particular geographic location.)

Days before the decision, former chairman Michael Powell launched a verbal broadside against the impending rule. On Wednesday (in Communications Daily) he called the then-pending proposal “potentially dangerous.” “This is like cable heaven,” he said. “Independents like Vonage and 8×8 are going to have more problems than cable” complying quickly. He went on to say “You can’t get this done in 4 months”. The government, he said, should have helped research ways to overcome the hurdles, rather than make itself an “adversary to industry.”

No one knows with certainty how the ruling will affect service. Among others, John Muleta, a former FCC wireless bureau chief, is pessimistic that the 120 day deadline can be met, saying solving the technical problems will take years rather than months to solve. In the interim, innovative VoIP service may be reined in. Customers, for instance, may no longer be able to get phone numbers that correspond to their geographic location. Overall, as cnet.com put it, the ruling may end up “morphing many freewheeling feature-rich VoIP companies into more staid ones.”

Of course, in the end it may have been hard for the FCC to avoid 911 mandates. In the wake of several well-publicized horror stories from VoIP consumers unable to access 911, the Commission was under intense pressure from Congress to act. Lawsuits against VoIP providers for the lack of full 911 service have also been piling up. Yet, the speed with which caved in to these pressures–despite evidence that the market was already responding–hardly inspires confidence. Last week’s decision may have been a special case, but–at the very least–the new chairman’s commitment to minimal regulation of new technology remains to be demonstrated.

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