II 

108TH CONGRESS 

2D SESSION S. 2281 

To provide a clear and unambiguous structure for the jurisdictional and 

regulatory treatment for the offering or provision of voice-over-Internetprotocol applications, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 5, 2004 

Mr. SUNUNU introduced the following bill; which was read twice and referred 

to the Committee on Commerce, Science, and Transportation 

A BILL 

To provide a clear and unambiguous structure for the jurisdictional and regulatory treatment for the offering or 

provision of voice-over-Internet-protocol applications, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 (a) SHORT TITLE.—This Act may be referred to as 

5 the ‘‘VOIP Regulatory Freedom Act of 2004’’. 

6 (b) PURPOSE.—The purpose of this Act is to prevent 

7 the imposition of harmful obligations or a patchwork of 

8 multiple and discriminatory regulations on the providers 
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1 of applications that utilize the Internet protocol or any 

2 successor protocol to offer 2-way or multidirectional voice 

3 communications. 

4 SEC. 2. ASSERTION OF FEDERAL JURISDICTION. 

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law, responsibility and authority to regulate the 

7 offering or provision of a voice-over-Internet-protocol ap8 plication is reserved solely to the Federal Government. 

9 (b) PROHIBITION OF STATE REGULATION.—No 

10 State or political subdivision thereof may enact or enforce 

11 any law, rule, regulation, standard, or other provision hav12 ing the force or effect of law that regulates, or has the 

13 effect of regulating, the offering or provision of a VOIP 

14 application. 

15 (c) PROHIBITION OF DELEGATION TO STATES.—Any 

16 responsibility or authority to regulate the offering or pro17 vision of a VOIP application that, pursuant to subsection 

18 (a), is reserved by the Federal Government may not be 

19 delegated, by any Federal agency or officer, to any State 

20 or political subdivision thereof. 

21 SEC. 3. PREEMPTION OF BROAD FCC AUTHORITY. 

22 Except as specifically provided in this Act and not23 withstanding any other provision of law, the Commission 

24 shall not impose any rule or regulation on, or otherwise 

25 regulate, the offering or provision of a VOIP application. 
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1 SEC. 4. FCC AUTHORITY REGARDING CONNECTED VOIP AP2 PLICATIONS. 

3 (a) INTERPROVIDER COMPENSATION.— 

4 (1) EXPLICIT BAN ON ACCESS CHARGES.—The 

5 offering or provision of a VOIP application shall not 

6 be subject to part 69 of the Commission’s rules (47 

7 C.F.R. 69) or successor charges. 

8 (2) ALTERNATE MECHANISM.—Paragraph (1) 

9 shall not be construed to prevent the Commission 

10 from establishing a compensation mechanism for 

11 providers of VOIP applications based on— 

12 (A) the mutual recovery of costs through 

13 reciprocal obligations; or 

14 (B) arrangements that waive mutual recov15 ery (such as bill-and-keep arrangements). 

16 (3) SINGLE REGIME REQUIRED.—The Commis17 sion may not impose a compensation mechanism 

18 based on the mutual recovery of costs through recip19 rocal obligations, pursuant to paragraph (2)(B), un20 less or until the Commission has established a single 

21 unified regime for the sending and receiving of all 

22 data and voice communications. 

23 (4) PRIVATE NEGOTIATIONS.—Nothing in para24 graph (2) shall be construed to prevent connected 

25 VOIP application providers from negotiating accept26 able arrangements for mutual recovery of costs for 
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1 the sending or receiving of voice communications of 

2 a connected VOIP application. 

3 (b) UNIVERSAL SERVICE.— 

4 (1) COMMISSION AUTHORITY.—The Commission 

5 shall ensure that all providers of a connected VOIP 

6 application contribute, directly or indirectly, to the 

7 preservation and advancement of Federal universal 

8 service programs based on a flat fee, which could in9 clude a collection methodology based on the assign10 ment of telephone numbers to end users. 

11 (2) EXEMPTION.—The Commission may exempt 

12 from contributing, pursuant to paragraph (1), any 

13 use or category of uses of connected VOIP applica14 tion. 

15 (c) ACCESS TO INFORMATION BY LAW ENFORCE16 MENT.—The Commission shall require a provider of a con17 nected VOIP application to provide access to necessary in18 formation to law enforcement agencies not less than that 

19 required of information service providers. 

20 (d) IMPLEMENTATION OF RULES.—Not later than 

21 180 days after the date of enactment of this Act, the Com22 mission shall take all necessary action to implement this 

23 section. 
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1 SEC. 5. VOLUNTARY INDUSTRY CONSENSUS PROCESS RE2 GARDING OTHER CONNECTED VOIP OBLIGA3 TIONS. 

4 (a) VOLUNTARY PROCESS.—The Commission shall 

5 appoint an appropriate representative industry organiza6 tion or organizations which shall, within 180 days after 

7 the date of the enactment of this Act, develop, as applica8 ble, consensus guidelines, protocols, or performance re9 quirements pertaining to the offering or provision of con10 nected VOIP applications for— 

11 (1) providing comparable capabilities to 911 

12 and enhanced 911 services; 

13 (2) improving use by the disabled community; 

14 (3) improving reliability of voice over Internet 

15 protocol applications; and 

16 (4) ensuring appropriate security for the appli17 cation and voice communications. 

18 (b) INFORMATION TO CUSTOMERS.—A provider of a 

19 connected VOIP application that does not provide for its 

20 customers services that are comparable to 911 service and 

21 enhanced 911 service shall provide a clear and conspicuous 

22 notice of the failure to provide such services to each cus23 tomer prior to the offering of the application to that cus24 tomer. 
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1 (c) TECHNICAL SUPPORT.—The Commission shall 

2 provide technical support, as appropriate, to the organiza3 tion selected pursuant to subsection (a). 

4 SEC. 6. COMMISSION REVIEW. 

5 Beginning in 2005, the Commission shall provide a 

6 report to Congress not less than biennially indicating any 

7 regulatory obligations that it recommends be enacted on 

8 the offering or provision of a VOIP application, including 

9 nondiscriminatory treatment for processing or treatment 

10 of digital packets. 

11 SEC. 7. NO TAXATION OF VOIP APPLICATIONS. 

12 (a) IN GENERAL.—No State or political subdivision 

13 shall impose any tax, fee, surcharge, or other charge for 

14 the purpose of generating revenues for governmental pur15 poses on the offering or provision of a VOIP application. 

16 (b) EXEMPTION.—Subsection (a) shall not apply to 

17 a fee imposed for a specific privilege, service, or benefit 

18 conferred. 

19 SEC. 8. NO IMPACT ON TRANSMISSION FACILITIES. 

20 Nothing in this Act shall affect the authority of the 

21 Commission or any State commission to regulate the 

22 transmission facilities used to transmit a voice commu23 nication of a VOIP application. This section may not be 

24 construed to authorize the Commission or any State to 
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1 regulate the offering or provision of a VOIP application 

2 by regulating such transmission facilities. 

3 SEC. 9. FTC AUTHORITY. 

4 (a) IN GENERAL.—Except as provided in subsection 

5 (b), nothing in this Act shall be constructed to affect the 

6 authority of the Federal Trade Commission to prevent un7 fair or deceptive acts or practices. 

8 (b) REGULATIONS EXCLUDED.—Subsection (a) does 

9 not authorize the Federal Trade Commission to issue any 

10 regulations to implement this Act. 

11 SEC. 10. DEFINITIONS. 

12 (a) IN GENERAL.—For purposes of this Act: 

13 (1) COMMISSION.—The term ‘‘Commission’’ 

14 means the Federal Communications Commission. 

15 (2) CONNECTED VOIP APPLICATION.—The term 

16 ‘‘connected VOIP application’’ means a VOIP appli17 cation that is capable of receiving voice communica18 tions from or sending voice communications to the 

19 public switched telephone network, or both. 

20 (3) CUSTOMER.—The term ‘‘customer’’ includes 

21 a consumer of goods or services whether for a fee, 

22 in exchange for an explicit benefit, or provided for 

23 free. 

24 (4) REGULATE.—The term ‘‘regulate’’ includes 

25 taking any governmental action that restricts, pro-
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1 hibits, limits, or burdens, or imposes any obstacle, 

2 obligation, or duty, or interferes with, an applica3 tion. 

4 (5) UNIVERSAL SERVICE.—The term ‘‘universal 

5 service’’ has the meaning given such term by section 

6 254(c) of such Act (47 U.S.C. 254(c)). 

7 (6) VOICE-OVER-INTERNET-PROTOCOL APPLICA8 TION; VOIP APPLICATION.— 

9 (A) IN GENERAL.—The terms ‘‘Voice-over10 Internet-protocol application’’ and ‘‘VOIP appli11 cation’’ mean the use of software, hardware, or 

12 network equipment for real-time 2-way or 

13 multidirectional voice communications over the 

14 public Internet or a private network utilizing 

15 Internet protocol, or any successor protocol, in 

16 whole or part, to connect users notwith17 standing— 

18 (i) the underlying transmission tech19 nology used to transmit the communica20 tions; 

21 (ii) whether the packetizing and 

22 depacketizing of the communications oc23 curs at the customer premise or network 

24 level; or 
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1 (iii) the software, hardware, or net2 work equipment used to connect users. 

3 (B) EXCLUSION.—The term does not in4 clude an application that is used for voice com5 munications that both originate and terminate 

6 on the public switched telephone network. 

7 (b) COMMON TERMINOLOGY.—Except as otherwise 

8 provided in subsection (a), terms used in this Act shall 

9 have the meaning provided under section 3 of the Commu10 nications Act of 1934. 

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