New Bill Envisions Federal Jurisdiction, Fixates On VoIP

Telecom Policy Report, Jan 19, 2005

This year's initial political volley on new telecom legislation surfaced earlier this month when Rep. U.S. Rep. Cliff Stearns (R-Fla.) - with co-sponsor Rick Boucher (D-Va.). - submitted a House bill to define all IP-based telecommunications, including voice, as interstate services exclusively subject to Federal Communications Commission jurisdiction.

What some regard as a first attempt advocating telecom reform in the 109th Congress -- albeit on a discrete aspect of communications and not a broad rewrite of the Telecommunications Act of 1996 -- the Stearns bill slipped into the legislative process on or about Jan. 4 during a brief congressional session (now in recess due the official acceptance and confirmation of the national presidential election and this week's presidential inauguration activities).

H.R. 214, entitled the Advanced Internet Communications Services (AICS) Act of 2005, is virtually the same as last year's H.R. 4757 of the same name, also introduced by Stearns and co-sponsored by Boucher to promote deployment of and investment in AICS. Introduced in July 2004, H.R. 4757 made it as far as the House Committee on Energy and Commerce and the Subcommittee on Telecommunications and the Internet by later that month. H.R. 214 currently is with the House Committee on Energy and Commerce, but any action must await the restructuring of committee membership and the work agenda, which is expected to take through mid- or late February.

In his new bill, Stearns repeated the measure is designed to enhance deployment of such AICS as Voice over Internet Protocol (VoIP) "by shielding them" from state regulations, although the congressman once again favorably acknowledged as steps in the right direction FCC decisions during February 2004 and November 2004 to keep VoIP services as free as possible from regulation and as being interstate in nature.

"Legislation still is needed to change the current regulatory scheme to allow these technologies to flourish," he said. "The existing web of complex regulations discourages investments and innovations in these products and services. This legislation offers regulatory certainty for these services, which will encourage investments in these technologies and their deployment."

Will The Second Time Be The Charm?

While calling on AICS to have interstate regulatory treatment, the new bill also contains the same language as last year's bill, further affirming AICS not be considered either a telecommunications service or an information service under the Communications Act of 1934. It also disallows the FCC and states from regulating AICS charges, terms or conditions or having any purview over the core IP transmission networks, facilities and equipment that may result in the unequal regulation.

The FCC's power to impose requirements or obligations on AICS providers, according to the bill, would involve ensuring appropriate E911 voice services, allowing access to such service by persons with disabilities, contributing directly to the universal service fund (USF) and providing usage compensation to the public switched telephone network (PSTN).

The regulatory-parity language may appeal to all or most incumbent carriers, emerging competitors and newcomers on the basis of "level playing field" arguments, but the hottest debate among the service providers, their lobbyists and political allies is likely to resurface regarding the legality and monetary amounts of USF contributions (if any) and the implications of compensation (if any) to the PSTN.

H.R. 214 broadly applies to IP-based voice, data and video services, platforms and applications yet it also singles out intent to cover fee-based communications where real-time voice is the primary function; the bill calls on the FCC to start rulemaking proceedings within 180 days after enactment and to come up with regulations 60 days after such proceedings are concluded. A Notice of Proposed Rulemaking reportedly is in the works at the FCC already.

Both Stearns and Boucher are said to have believed last year's legislation stood little chance of passage in the 108th Congress, but they express hope that this year's H.R. 214 bill - if not granted passage - might at least pave the way or set the pace for more sweeping overhauls of the 1996 Act in this year's session. Possible sources of new legislation may be Rep. John Dingell (D-Mich.) and/or Rep. Fred Upton (R-Mich.); late last year, Upton successfully added an amendment on the FCC's E-Rate program to a 911-related bill.

FCC commissioners and staff plus others in Washington, D.C., circles expect many new telecom proposals in the 109th Congress. "There should be a lot more legislation coming this year," Robert McDowell, senior vice president for legislative affairs at the CompTel/ASCENT industry group, remarked to Telecom Policy Report.

Besides the Stearns-Boucher bill last year, another effort on VoIP during 2004 -- H.R. 4129 -- was authored by Rep. Chip Pickering (R-Miss.), mirroring a Senate bill (S. 2281) sponsored by Sen. John Sununu (R-N.H.). The parallel bills, both dubbed "The VoIP Regulatory Freedom Act of 2004," were intended to foster the evolution of the technology within the U.S. telecom industry and to put IP services under exclusive regulatory jurisdiction.