VoIP providers eye changes to regulations

For the last 10 years, Voice over IP (VoIP) services have exploded in popularity. Every day millions of Americans rely on the service to make the majority of their traditional phone calls. Why are more and more people turning to the Internet-based service? Most will tell you that the lowered cost is the biggest selling point, especially when compared with fees for landline service. And it’s not just the residential sector that’s been affected – more businesses are eying VoIP as a viable alternative.

It’s a trend that’s been closely monitored by the Federal Communications Commission, which recently announced it would take steps to make telephone numbers more accessible to companies that offer VoIP services. In the past, numbers could only be obtained by state certified telecommunication carriers, meaning alternative carriers have been accessing numbers via accredited companies. Some of those companies have built their entire business around resale of services and numbers to VoIP providers.

But that’s about to change. A new trial will see Vonage – with 2.4 million subscribers in the U.S. – given access to 150,000 numbers that it can assign to customers. In turn, Vonage will report back monthly. If problems arise, the FCC retains the right to take back the numbers. While it is the only company that has been given the green light thus far, the FCC is considering opening up the process to more carriers.

Outgoing FCC chairman Julius Genachowski said the move would reduce barriers to innovation and competition for providers of voice services.

“Today these providers generally have to obtain telephone numbers through intermediate providers, raising costs and creating potential gatekeepers to the deployment of new services,” said Genachowski, in a recent statement. “Removing these barriers has the potential to deliver real benefits to consumers. It could help improve call quality thanks to fewer hand-offs for calls, and promote deployment of HD voice services. And it could fuel development of other innovative new products.”

The decision to allow Vonage to assign numbers was in response to a waiver request by the company. But it wasn’t without controversy. A number of organizations including the AARP, the Consumer Federation of America, and National Association of Regulatory Utility Commissioners – an association that represents state regulators – are arguing opening up telephone number distribution is ill-timed and ill-conceived. They claim a full proceeding is needed to determine how regulatory authorities will retain their ability to protect clients and consumer interests.

“Rather than rush to judgment in a way that creates a race to the bottom, we urge the Commission to take a moment to consider the long-term consequences of granting a waiver that effectively prejudges an NPRM (notice of proposed rulemaking) and undermines a long-standing framework that this Commission has depended on to prevent anti-consumer behavior,” stated a letter to FCC commissioners from the groups.

According to the letter, allowing providers who were not state certified to assign numbers is in contravention of the Telecom Act. There are also concerns that giving Vonage the privilege sets a precedent and opens the doors to others to do the same without due process.

“Poor management can lead to unnecessary exhaust of area codes requiring state-level relief proceedings and development of implementation plans that are costly and can have a negative impact on both consumers and commerce,” the letter warned.

However, the FCC maintains the move could help speed up the development of innovative services like HD voice. It is seeking feedback and comment on a number of related topics such as to whether interconnected VoIP providers should be able to access numbers, and how access can be eased for other services including IP access to emergency services, home security systems and text messaging services, to name just a few.