Global termination voip

Industry Experts, Analysts Fear Worldwide Disparate Policies

Jeff Pulver, president and CEO of Pulver.com and an internationally renowned pioneer of Voice over Internet Protocol (VoIP), fears for the future of the nascent technology.

Pulver is the creator of "free world dialup," a pure play VoIP service that connects VoIP enthusiasts in more than 180 countries. It was Pulver's "free world dialup" service that inspired the FCC to issue its very first VoIP-specific order earlier this year. That order, sometimes referred to as the "Pulver order," initially established the FCC's "light touch" approach to VoIP.

"I'm very concerned that other regulatory agencies around the world will not follow the lead of the FCC," he told attendees last Friday (July 30) at a FCC-sponsored roundtable discussion on global VoIP policy. "Frankly, I'm even concerned that this country may backtrack away from the forward-looking approach that inspired the Pulver order."

Pulver noted that some policymakers in the United States and overseas have begun taking a critical look at VoIP, suggesting that certain types of VoIP service providers ought not to be able to take full advantage of IP technology to provide innovative services.

"For instance, I see the European Union suggesting that IP-based services might be subjected to some onerous regulatory restrictions," Pulver said. "A similar proceeding is under way in Australia, and I fear there will be others like it around the world. There are even some rumblings here in the United States, both at the state and federal levels, that this nascent industry should be subject to some archaic regulatory rules that never contemplated the empowering capabilities of IP-based communications."

Pulver noted that two weeks ago, in what was a procedural maneuver, an amendment was attached to Sen. John Sununu's (R-N.H.) proposed "VoIP Freedom from Regulation Act" that arguably would require people who are playing Xbox Live to pay into the universal service and intercarrier compensation support systems simply because Xbox uses a voice application. "This absolutely runs counter to the logic of the Pulver order and will only serve to stifle the growth of IP communications," Pulver said. "This leaves me in a position of actually having to lead the charge against this bill."

Pulver said he fully expects the 2005-2006 legislative season in Washington to be a pivotal period for the future of IP-based communications in the United States and, for that matter, the rest of the world.

Pulver's concerns about the increasing level of regulatory uncertainty that has begun overshadowing VoIP were largely echoed by Al Safarikas, vice president of wireline networks at Nortel Networks.

Nortel's View Of VoIP

"IP-based services are going to break all of the traditional understandings of the way services are now deployed," Safarikas said. "I'm speaking of services now, not necessarily of networks ... VoIP is just the tip of the iceberg, and it breaks down all kinds of boundaries."

In fact, Nortel Networks is now talking about "business without boundaries," Safarikas noted.

"When we speak of business without boundaries, certainly some of the kinds of boundaries we're talking about are global, geographic boundaries --traditional boundaries between countries and regions. But there are other types of boundaries that extend far beyond the traditional definition," Safarikas said. "For instance, there are technological boundaries. There are limits between wireless and wireline. There are boundaries that were set up between carries. We speak of those boundaries in the regulatory world. We refer to them as access regimes or intercarrier compensation regimes." IP is rapidly breaking down those boundaries, he said, and VoIP is leading the charge.

Safarikas believes the global broadband network of today will eventually have to be completely rebuilt. "Although we speak of broadband today in terms of 1, 2 or 3 Mbps transfer rates, when we start looking at IP and the power of IP-based communications, it's clear the broadband network is going to have to grow. That is going to require a tremendous investment from providers around the world. And in order for them to make that investment, it's going to require an environment of regulatory certainty."

Consistent International Regulations An Absolute Must

For broadband equipment vendors like Cisco Systems, regulatory certainty on a global level is an absolute must, according to Mary Brown, Cisco's senior telecommunications policy counsel.

"We care mainly about fostering broadband throughout the world," she said. "We believe that VoIP is going to be one of the drivers of broadband implementation throughout the world." From Cisco's perspective, there is a definite need for consistent VoIP policy in the world because "we need a worldwide market in order to sell our equipment."

Cisco Systems recently shipped its 3 millionth VoIP phone, she said. Further illustrating how fast the worldwide growth rate for VoIP is accelerating, Brown said it took Cisco three years to ship 1 million VoIP phones. It took a year to ship its 2 millionth phone, and only eight more months to reach the 3 million mark, she said.

Jonathan Draluck, vice president for business affairs and general counsel of iBasis Inc., a global provider of pre-paid international long distance services, says his company is using VoIP technology to "lower international long distance prices in and out of countries all over the world."

Draluck estimates that iBasis is now the tenth largest international long distance carrier in the world. The company has the infrastructure in place that allows international calling from virtually any place in the world, he says.

The World View Of The U.S. Approach

"We've met with a lot of regulators, because our customers include nearly every major carrier in the world," Draluck said. "And we've found that regulators want to be the patrons of this new technology. But they have asked us many times, 'How do we regulate this?' For regulators around the globe, nothing has been more clear a signal than the one the United States has provided. And the United States has said it wants a light regulatory touch. More than anything else in the world, it is the approach of the United States that has fueled the innovation and growth of this industry."

Draluck said he isn't certain about exactly what it is that is now driving the discussion about how to regulate VoIP. "However, I am sure it's not the low-budget innovators who are deploying new customer premises equipment or who are deploying new networks like my company is," he said.

"Some bigger players have said they're afraid to invest as long as there exists so much regulatory uncertainty. Well, that hasn't stopped my company from investing hundreds of millions of dollars. We have thought of ourselves as a poster child for Cisco, our primary vendor. And we continue to deal with the challenges of overseas markets where government officials have questions about how we operate and in which licensing regime we should operate."

What is also clear to Draluck is that "we haven't heard from anyone in this industry saying they are unwilling to pay their fair share ...for things to which we all agree everyone should contribute," a veiled reference to issues such as universal service and emergency 911 support.

Driving Broadband Accessibility

Glen Campbell, telecom and cable analyst with Merrill Lynch-Canada, said his company last June began a study of VoIP. What the investment advisory firm found was that "different governments and different regulators are taking different approaches to driving accessibility to broadband," Campbell said. "But the bottom line seems to be that competition is the key element in countries that have achieved the highest rate of penetration.

"If you step back from the underlying issue of broadband access to the Voice over IP services," he continued, "the issue becomes more complex. VoIP requires the removal of barriers to competition for new entrants." Such barriers include regulatory requirements that mandate high termination costs, he said.