Regulating VoIP Services

An excellent article on the issues facing governments in the US and Europe around classification and regulation of VoIP services appears in the most recent issue of First Monday. The authors go into great depth to summarize the steps taken to date in both the US and Europe by regulators, and characterize the regulation of VoIP services as “inevitable.”

“There is a fundamental difference between VOIP and previous IP–powered innovations such as e–mail or Instant Messaging: these latter technologies burst into a new, unregulated space. There was no market for e–mail prior to the commercial diffusion of e–mail, for instance. There were no market rules, no incumbents used to operating under these rules, and no past policy objectives dependent on the execution of the rules. By contrast, VOIP services inevitably run headlong into traditional telephony regulation, characterized by detailed oversight and common–carrier obligations. Over the course of more than a century, policymakers have devised a dense set of rules and regulations covering emergency services, network integrity, universal access, and the allocation of scarce identifiers such as telephone numbers, to name just a few. As VOIP displaces current telecommunications technologies, it will inevitably be confronted with these regulatory legacies.”

Among a number of other interesting points made, the article makes a fascinating observation about the nature of government regulation (or, rather, about government regulators).

“The debate over how to classify VOIP represents the leading edge of the question whether regulatory classification is useful in a world of converging technologies. In other words, precisely because VOIP forces the convergence of previous era telecommunications and the Internet, we ought to pause and ask whether regulation from that previous era still makes sense.”

In other words, the knee jerk reaction of government regulators may be to try and classify VoIP using existing regulatory frameworks because that is simply what they do. Or, more accurately, despite the difficulty inherent in trying to classify VoIP using old school classifications this is much more palatable than opening a debate on whether the role of government oversight and regulation is fundamentally changing in the wake of staggering technical innovation. In short, if the only tool in your toolbox is a hammer, then everything starts to look like a nail.

An intersting read — well worth the time of anyone interested in VoIP.