Monopolistic Pressures?

by on January 4, 2006

Ars Technica reports on the release of a full suite of open source VOIP software. This has some interesting policy implications. So far, regulators have been focused on getting large, commercial VOIP providers like Vonage to comply with the various tax and regulatory requirements. But as free VOIP solutions become ever more available and accessible, there won’t be anybody to tax and regulate. If I set up VOIP server in my basement, something I can probably do for a few hundred dollars, do I have to register with the FCC and my state regulatory agency as a telecom company? Or am I only required to comply with regulatory requirement if I connect to the PSTN?

Ars has a pretty consistently anti-corporate editorial stance, and I think their conclusion on the implications for net neutrality regulations gets the situation rather backwards:

The unwavering avarice of big telecom has also become an impediment, with at least one major ISP publicly asserting that it will not allow competing VoIP services to operate over its lines. In response to the blatantly anti-competitive sentiment of such ISPs, House Energy and Commerce Committe Chairman Joe Barton has proposed a network neutrality law that will prevent monopolistic pressure from devesting VoIP innovation. VoIP technology is increasingly important in our highly connected world, and the availability of open source VoIP solutions will help popularize the technology in less developed countries where organizations can’t afford the proprietary alternatives.

What the existence of open-source VOIP software means is that it’s going to be increasingly difficult for the Baby Bells to control its use. If it were just Vonage, the Baby Bells would simply need to figure out how to detect and block traffic for that one application. But if there are thousands of geeks tinkering with an free VOIP networking stack, there will be a proliferation of new VOIP applications that circumvent the Bells’ restrictions in different ways. Rather than fighting an arms race with a handful of easy-to-identify software companies, they’ll be fighting it with hundreds of geeks scattered around the world. It’s a battle they’re certain to lose. And that makes network neutrality legislation less, not more, necessary.

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