Out of Control

Here Lehrer grasps two third rails in current telecom policy—E-911 and universal access. Insistence by lawmakers that new telephony platforms fit these mandates, mitigates against their spread and use.

“Access to E-911 services is one of the greatest disadvantages of VoIP—and, possibly, new device-based—telephone systems relative to their land line counterparts. Since their introduction in the late 1970s, E-911 systems have transmitted callers’ locations directly to emergency call centers to speed up the arrival of police and fire agencies. Clearly, their existence has improved public safety. By their very nature, however, existing E-911 technology cannot work perfectly with any existing VoIP systems: Both telephony devices (Ooma Boxes) and the VoIP routers will operate when attached to any Internet connection anywhere in the world….

“Since 2006, however, the FCC has required VoIP providers to provide location information by collecting it and then transmitting it to emergency response centers. This approach had the support of the VoIP industry. (At least no VoIP carriers lobbied against it and the largest one, Vonage, appears to have supported it.) But it also resulted in an increase of roughly $1 a month—around 3 to 4 percent—in the average bill for VoIP service…

“Universal access fees—long assessed on all traditional telephone bills—seem similarly ill suited to new types of land line telephone service. Since 2006, however, the FCC has applied them to VoIP services that use the PSTN. (The FCC, however, does not tax pure Internet telephone calls made through services like Skype since they do not use the PSTN.)”

“Although it may help advance some noble social goals, the telephone system’s current structure makes the universal service fee an anachronism for three reasons. First, the United States already has universal telephone service. Second, the nature of current technology means that imposing a ‘universal service fee’ involves central planners making choices about the nature of technologies that consumers ought to make for themselves. Finally, new technologies erase the cost differences between rural and urban areas that originally justified the fee.”

Somehow I think regulators who in all earnestness opened the door to landline competition expected a bunch of new telephone companies to spring up with copper networks that mirrored the incumbents’. UNE-P, which forced telco’s to provide competitors with copper loops was a regulatory response that seemed to suggest such root expectations. The emergence of alternative technologies, which are not identical to copper dial tone yet perfectly substitutable for it, seems to have flummoxed lawmakers from Congress to the local town board, even though analogous examples competition-through-differentiation exist in other markets. Sadly, rather than address new telco platforms on their own terms, the response is to shoehorn mandates where they don’t fit.

A tip of that hat to Cord Bluquest at the Technology Liberation Front for the heads-up.