This document is in response to the request made on October 20, 2003 to
the FCC TAC to provide inputs to the members regarding regulations on
Internet services, and particularly focused on VoIP.

We argue that the future of voice networks of all types is that:

**Voice is not a "type of network" but a higher-level application or
traffic type flowing over networks defined at lower levels.**

Accordingly, all voice services should be considered to be an
"information service."

We consider the implications of this.

# Purpose of regulation

1.  Provide tax basis

2.  Promote competition and innovation

3.  Enable support of services in otherwise uneconomic situations
    (lifeline, RUS)

4.  Assure role of SPs & communications as an important national asset

    a.  Government, industry and consumers need communications to be
        stable & reliable

    b.  Government needs to be able to execute "wiretap" authority

# Need for uniformity

1.  We observe that the current regulatory schema creates violently
    different approaches to apparently identical services, both for
    voice services as well for high speed (Broadband) Internet services:

    a.  Voice telephony has very different regulatory treatment in each
        of the four different types of networks below:

        i.  As wireline, has E-911, CALEA, reliability, LNP

            1.  DS0 must be unbundled for competitors as UNE

            2.  CPE cannot be tied to service provider

            3.  Calling party pays

                a.  Exception: 800 services

            4.  Access charges

            5.  LATA-geographies define who carries call

                a.  Consumer can choose LD, local

            6.  Must publish tariffs

        ii. As mobile, lacks E-911, lower reliability, LNP being
            adopted, lower voice quality

            1.  No unbundling

            2.  CPE explicitly tied to SP

            3.  Calling AND called party pay

            4.  Access charges, sometimes

            5.  SP of entry determines who carries call

            6.  No tariff

        iii. As VoIP, completely escapes regulation

             1.  No concept of unbundling

             2.  CPE is any computer, or CPE router, etc.; no tie (but
                 this may change)

                 a.  E.g. Vonage uses a Cisco router: that may be an
                     explicit tie; any home phone can attach.

                 b.  Skype uses any PC using MSFT Win software. (Linux,
                     Mac versions?)

             3.  Access charges, sometimes to never

             4.  SP of entry determines who carries call

             5.  No tariff

        iv. As cable telephony, lacks E-911, reliability, ...?

            1.  No unbundling; but this has been overturned ?

            2.  CPE is explicitly tied to SP

            3.  Access charges (use of PSTN)

            4.  SP of entry determines who carries call

                a.  Consumer has no choice of SP

            5.  No tariff

    b.  High speed Internet access

        i.  As wireline, DSL; has been separately unbundled, e.g. by
            Covad, or can unbundle entire capacity of loop via UNE

        ii. As mobile: N/A

        iii. As cable access: has been no enabled unbundling, but this
             has been challenged in court

        iv. WiFi: unlicensed spectrum, free access to local hotspot that
            has no unbundling requirements

        v.  Other wireless: TBD

2.  Regulatory quandaries

    a.  Regulations as they exist reflect decisions made on differing
        criteria

        i.  ILECs get hit because, well, they're the ILECs

        ii. VoIP is exempt because its originating CPE is a computer

            1.  Which makes VoIP an "information service"

            2.  But points to an increasingly daft problem: since CPU
                cost declines, the distinction between a computer and a
                phone will disappear.

        iii. Mobile is exempt from some of the regulations on wireline
             because it uses airwaves

        iv. Cable telephony argued for lower reliability standards

            1.  Because of the high cost of network power

    b.  Desire and need to promote innovation conflict with need to
        assure stability of national infrastructure

        i.  Exempting VoIP enables erosion of financial base of other
            SPs but ...

        ii. ... if a technology needs its competitors to be pinned down
            in order to win, is it really superior?

            1.  Expressed another way: does the decision to exempt VoIP
                constitute a government selection of a preferred
                technology?

            2.  If it does, what is the basis for that preference?

        iii. VoIP, other competing technologies exempt from various
             regulations and tax burdens, but (will seriously) erode the
             business of those who still have those regulations and tax
             burdens.

3.  We would argue that a most essential goal is uniformity of
    regulations, using primitives that are unarguable:

    a.  It does not matter at all what the underlying technology is, nor
        what flavor of physical medium was used, nor what type of
        service provider self-definition.

    b.  This is entirely consistent with the FCC's existing distinctions
        between information services (which involve the transfer of data
        whose form does not change as it traverses the network) and need
        not be unbundled, and communications service (which do change
        form) and must be unbundled.

    c.  If CPE initiates signaling into the network that makes the last
        analog phone on earth ring, and the initiator and respondent can
        participate in duplex voice transfer: it's telephony

        i.  In almost all attributes telephony acts as an information
            service

            1.  except that data and voice are generally kept in
                separate parts of telecom's lexicon

            2.  and that telephony requires database dips, billing
                authentication, etc.

4.  The consequences of this (and the consequences of not doing this)

    a.  IF VoIP is not telephony BUT is neither an information service
        NOR a communications service, THEN it is exempt from E911, RUS,
        CALEA, etc. AND thus will likely have permanently lower cost,
        reliability, utility in emergency, etc. As such, it can and will
        erode higher cost, higher-reliability businesses. So, we either:

        i.  accept this (and by implication accept the erosion of CALEA,
            E911, RUS, ...)

        ii. or require a cross-subsidy from VoIP (probably identified by
            the businesses that provide such service?) to other areas

        iii. or we require a uniform regulatory construct

    b.  IF VoIP IS telephony BUT IS NOT an information service (BUT is
        (or is not) a communications service), THEN we have a continuing
        regulatory conundrum, in which we have established legal
        definitions of services based upon the content of packets
        (cells, frames) and in a way that will fail logical tests (e.g.,
        in joint transmission of voice AND non-voice), and that will be
        difficult or impractical or impossible to resolve using
        technologies unless those are massively invasive. (Meaning: the
        SPs would have to open, decrypt, etc. each session to determine
        what regulatory or billing construct to use.)

    c.  IF VoIP IS telephony AND IS an information service, not a
        communications service, THEN we explicitly distinguish between
        bandwidth provision (circuit setup and tear down, etc.) and the
        end-to-end service that rides over it. Here we can either:

        i.  Mandate that all voice networks comply with CALEA, or not,
            without regard to the underlying protocols or the
            self-description of the service provider

        ii. Mandate that

            1.  EITHER all voice networks comply with E911 (and
                high-reliability, possibly including network power)

            2.  OR that all voice networks, collectively, contribute
                sufficient funds to be set aside to assure that all
                homes and businesses have E911-compliant (& high-rel)
                phones

            3.  again without regard to the underlying protocols or the
                self-description of the service provider

The authors respectfully thank the FCC TAC for the opportunity to
comment on this topic, and would be happy to follow up as required.

Sincerely,

> John Ryan
>
> Muayyad Al-Chalabi

## Nitin J. Shah