II 

Calendar No. 812 

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 

NOVEMBER 19, 2004 

Reported by Mr. MCCAIN, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

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

2 the imposition of harmful obligations or a patchwork of 

3 multiple and discriminatory regulations on the providers 

4 of applications that utilize the Internet protocol or any 

5 successor protocol to offer 2-way or multidirectional voice 

6 communications. 

7 SEC. 2. ASSERTION OF FEDERAL JURISDICTION. 

8 (a) IN GENERAL.—Notwithstanding any other provi9 sion of law, responsibility and authority to regulate the 

10 offering or provision of a voice-over-Internet-protocol ap11 plication is reserved solely to the Federal Government. 

12 (b) PROHIBITION OF STATE REGULATION.—No 

13 State or political subdivision thereof may enact or enforce 

14 any law, rule, regulation, standard, or other provision hav15 ing the force or effect of law that regulates, or has the 

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

17 application. 

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

19 responsibility or authority to regulate the offering or pro20 vision of a VOIP application that, pursuant to subsection 

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

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

23 or political subdivision thereof. 
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1 SEC. 3. PREEMPTION OF BROAD FCC AUTHORITY. 

2 Except as specifically provided in this Act and not3 withstanding any other provision of law, the Commission 

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

5 regulate, the offering or provision of a VOIP application. 

6 SEC. 4. FCC AUTHORITY REGARDING CONNECTED VOIP AP7 PLICATIONS. 

8 (a) INTERPROVIDER COMPENSATION.— 

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

10 offering or provision of a VOIP application shall not 

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

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

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

14 shall not be construed to prevent the Commission 

15 from establishing a compensation mechanism for 

16 providers of VOIP applications based on— 

17 (A) the mutual recovery of costs through 

18 reciprocal obligations; or 

19 (B) arrangements that waive mutual recov20 ery (such as bill-and-keep arrangements). 

21 (3) SINGLE REGIME REQUIRED.—The Commis22 sion may not impose a compensation mechanism 

23 based on the mutual recovery of costs through recip24 rocal obligations, pursuant to paragraph (2)(B), un25 less or until the Commission has established a single 
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1 unified regime for the sending and receiving of all 

2 data and voice communications. 

3 (4) PRIVATE NEGOTIATIONS.—Nothing in para4 graph (2) shall be construed to prevent connected 

5 VOIP application providers from negotiating accept6 able arrangements for mutual recovery of costs for 

7 the sending or receiving of voice communications of 

8 a connected VOIP application. 

9 (b) UNIVERSAL SERVICE.— 

10 (1) COMMISSION AUTHORITY.—The Commission 

11 shall ensure that all providers of a connected VOIP 

12 application contribute, directly or indirectly, to the 

13 preservation and advancement of Federal universal 

14 service programs based on a flat fee, which could in15 clude a collection methodology based on the assign16 ment of telephone numbers to end users. 

17 (2) EXEMPTION.—The Commission may exempt 

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

19 use or category of uses of connected VOIP applica20 tion. 

21 (c) ACCESS TO INFORMATION BY LAW ENFORCE22 MENT.—The Commission shall require a provider of a con23 nected VOIP application to provide access to necessary in24 formation to law enforcement agencies not less than that 

25 required of information service providers. 
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1 (d) IMPLEMENTATION OF RULES.—Not later than 

2 180 days after the date of enactment of this Act, the Com3 mission shall take all necessary action to implement this 

4 section. 

5 SEC. 5. VOLUNTARY INDUSTRY CONSENSUS PROCESS RE6 GARDING OTHER CONNECTED VOIP OBLIGA7 TIONS. 

8 (a) VOLUNTARY PROCESS.—The Commission shall 

9 appoint an appropriate representative industry organiza10 tion or organizations which shall, within 180 days after 

11 the date of the enactment of this Act, develop, as applica12 ble, consensus guidelines, protocols, or performance re13 quirements pertaining to the offering or provision of con14 nected VOIP applications for— 

15 (1) providing comparable capabilities to 911 

16 and enhanced 911 services; 

17 (2) improving use by the disabled community; 

18 (3) improving reliability of voice over Internet 

19 protocol applications; and 

20 (4) ensuring appropriate security for the appli21 cation and voice communications. 

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

23 connected VOIP application that does not provide for its 

24 customers services that are comparable to 911 service and 

25 enhanced 911 service shall provide a clear and conspicuous 
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1 notice of the failure to provide such services to each cus2 tomer prior to the offering of the application to that cus3 tomer. 

4 (c) TECHNICAL SUPPORT.—The Commission shall 

5 provide technical support, as appropriate, to the organiza6 tion selected pursuant to subsection (a). 

7 SEC. 6. COMMISSION REVIEW. 

8 Beginning in 2005, the Commission shall provide a 

9 report to Congress not less than biennially indicating any 

10 regulatory obligations that it recommends be enacted on 

11 the offering or provision of a VOIP application, including 

12 nondiscriminatory treatment for processing or treatment 

13 of digital packets. 

14 SEC. 7. NO TAXATION OF VOIP APPLICATIONS. 

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

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

17 the purpose of generating revenues for governmental pur18 poses on the offering or provision of a VOIP application. 

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

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

21 conferred. 

22 SEC. 8. NO IMPACT ON TRANSMISSION FACILITIES. 

23 Nothing in this Act shall affect the authority of the 

24 Commission or any State commission to regulate the 

25 transmission facilities used to transmit a voice commu-
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1 nication of a VOIP application. This section may not be 

2 construed to authorize the Commission or any State to 

3 regulate the offering or provision of a VOIP application 

4 by regulating such transmission facilities. 

5 SEC. 9. FTC AUTHORITY. 

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

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

8 authority of the Federal Trade Commission to prevent un9 fair or deceptive acts or practices. 

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

11 not authorize the Federal Trade Commission to issue any 

12 regulations to implement this Act. 

13 SEC. 10. DEFINITIONS. 

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

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

16 means the Federal Communications Commission. 

17 (2) CONNECTED VOIP APPLICATION.—The term 

18 ‘‘connected VOIP application’’ means a VOIP appli19 cation that is capable of receiving voice communica20 tions from or sending voice communications to the 

21 public switched telephone network, or both. 

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

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

24 in exchange for an explicit benefit, or provided for 

25 free. 
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1 (4) REGULATE.—The term ‘‘regulate’’ includes 

2 taking any governmental action that restricts, pro3 hibits, limits, or burdens, or imposes any obstacle, 

4 obligation, or duty, or interferes with, an applica5 tion. 

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

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

8 254(c) of such Act (47 U.S.C. 254(c)). 

9 (6) VOICE-OVER-INTERNET-PROTOCOL APPLICA10 TION; VOIP APPLICATION.— 

11 (A) IN GENERAL.—The terms ‘‘Voice-over12 Internet-protocol application’’ and ‘‘VOIP appli13 cation’’ mean the use of software, hardware, or 

14 network equipment for real-time 2-way or 

15 multidirectional voice communications over the 

16 public Internet or a private network utilizing 

17 Internet protocol, or any successor protocol, in 

18 whole or part, to connect users notwith19 standing— 

20 (i) the underlying transmission tech21 nology used to transmit the communica22 tions; 

23 (ii) whether the packetizing and 

24 depacketizing of the communications oc-
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1 curs at the customer premise or network 

2 level; or 

3 (iii) the software, hardware, or net4 work equipment used to connect users. 

5 (B) EXCLUSION.—The term does not in6 clude an application that is used for voice com7 munications that both originate and terminate 

8 on the public switched telephone network. 

9 (b) COMMON TERMINOLOGY.—Except as otherwise 

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

11 have the meaning provided under section 3 of the Commu12 nications Act of 1934. 

13 SECTION 1. SHORT TITLE. 

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

15 ‘‘VOIP Regulatory Freedom Act of 2004’’. 

16 SEC. 2. ASSERTION OF FEDERAL JURISDICTION. 

17 (a) IN GENERAL.—Notwithstanding any other provi18 sion of law, authority to regulate the offering or provision 

19 of a voice-over-Internet-protocol application is reserved sole20 ly to the Federal Government. 

21 (b) PROHIBITION OF STATE REGULATION.—No State 

22 or political subdivision thereof may enact or enforce any 

23 law, rule, regulation, standard, or other provision having 

24 the force or effect of law that regulates, or has the effect 
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1 of regulating, the offering or provision of a VOIP applica2 tion. 

3 (c) PRESERVATION OF CONSUMER PROTECTION.— 

4 Nothing in this Act shall be construed to affect the authority 

5 of a State to enact or enforce criminal laws or regulations 

6 of general applicability regarding doing business in that 

7 State, consumer protection, or unfair or deceptive trade 

8 practices. 

9 (d) 911 AND ENHANCED-911 SERVICES JURISDIC10 TION.—Notwithstanding any other provision of law, noth11 ing in this Act limits— 

12 (1) State jurisdiction of 9–1–1 or enhanced 9–1– 

13 1 services, including State jurisdiction over connected 

14 VOIP applications with respect to 9–1–1 and en15 hanced 9–1–1 services; or 

16 (2) the ability of State and local governments to 

17 require providers of all connected VOIP applications 

18 to collect fees to support the provision of 9–1–1 or en19 hanced 9–1–1 services. 

20 (e) PRESERVATION OF UNIVERSAL SERVICE AND

21 INTERPROVIDER COMPENSATION.—Nothing in this Act 

22 shall be construed to exempt providers of a VOIP applica23 tion from requirements imposed by a State commission on 

24 all providers of telecommunications services— 
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1 (1) to pay appropriate compensation for the 

2 transmission of a VOIP application over the facilities 

3 and equipment of another provider; or 

4 (2) to contribute on an equitable and non5 discriminatory basis to the preservation and advance6 ment of universal service. 

7 SEC. 3. NO IMPACT ON TRANSMISSION FACILITIES. 

8 Nothing in this Act shall affect the authority of the 

9 Federal Communications Commission or any State to regu10 late the transmission facilities used to transmit a voice 

11 communication of a VOIP application. This section may 

12 not be construed to authorize the Federal Communications 

13 Commission or any State to regulate the offering or provi14 sion of a VOIP application by regulating such transmission 

15 facilities. 

16 SEC. 4. 9–1–1 AND ENHANCED 9–1–1 SERVICES. 

17 (a) COMMISSION AUTHORITY.—Not later than 180 

18 days after the date of enactment of this Act, the Commission 

19 shall conclude a proceeding establishing rules to ensure that 

20 all providers of connected VOIP applications provide, to the 

21 extent technically feasible and not economically unreason22 able, 9–1–1 and enhanced 9–1–1 services comparable to 

23 those provided by other telecommunications carriers. 

24 (b) REPORTS TO CONGRESS.—No later than the first 

25 day of October, 2005, and each year thereafter, the Commis-
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1 sion shall transmit a report to the Senate Committee on 

2 Commerce, Science, and Transportation and the House of 

3 Representatives Committee on Energy and Commerce on 

4 the progress of enhanced 9–1–1 implementation for con5 nected VOIP applications. In its report, the Commission 

6 shall include summaries of comments it has received from 

7 the public regarding the performance of connected VOIP ap8 plication providers in providing 9–1–1 and enhanced 9– 

9 1–1 services and examine issues related to non-discrimina10 tory access between connected VOIP applications and in11 cumbent 911 networks and data systems. 

12 SEC. 5. LAW ENFORCEMENT. 

13 (a) IN GENERAL.—Nothing in this Act shall be con14 strued to modify, impair, or supersede the Communications 

15 Assistance for Law Enforcement Act (47 U.S.C. 1001 et 

16 seq.) or the authority of the Commission thereunder, nor 

17 shall anything in this Act alter the obligation of a provider 

18 of a VOIP application to furnish to an authorized law en19 forcement agency, pursuant to a court order under chapter 

20 119 or 206 of title 18, United States Code (or comparable 

21 provisions of State law), or under the Foreign Intelligence 

22 Surveillance Act of 1978 (50 U.S.C. 1801 et seq.), all infor23 mation, facilities, and technical assistance necessary to ac24 complish an interception or the installation of a pen reg25 ister or trap and trace device. 
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1 (b) GAO REPORT.—Not later than 6 months after the 

2 date of the enactment of this Act, the Comptroller General 

3 shall submit a report to the Senate Committee on Com4 merce, Science, and Transportation, the Senate Committee 

5 on the Judiciary, the House of Representatives Committee 

6 on Energy and Commerce, and the House of Representatives 

7 Committee on the Judiciary that includes— 

8 (1) an assessment of law enforcement’s current 

9 technical capability to intercept and analyze commu10 nications over the public Internet or using the Inter11 net protocol; 

12 (2) an assessment of problems, if any, law en13 forcement has encountered in intercepting or ana14 lyzing communications over the public Internet or 

15 using the Internet protocol; 

16 (3) a description of options for addressing any 

17 such problems, including such options as capability 

18 requirements or providing additional resources for 

19 law enforcement agencies to acquire the skills and 

20 equipment to analyze Internet communications; 

21 (4) an evaluation of such options for different 

22 configurations of broadband access, connected VOIP 

23 service, and VOIP applications in terms of effective24 ness, effect on innovation, effect on privacy, and the 

25 cost to consumers; and 
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1 (5) an assessment of the first 10 years of imple2 mentation of the Communications Assistance for Law 

3 Enforcement Act (47 U.S.C. 1001 et seq.), includ4 ing— 

5 (A) an assessment of the level of compliance 

6 with that Act within different segments of the 

7 communications industry and an identification 

8 of the reasons for less-than-full compliance in 

9 particular segments of the industry; 

10 (B) a cost-benefit analysis of the impact of 

11 that Act on the communications industry, in12 cluding the costs expended by industry to imple13 ment specific capabilities, the frequency of use by 

14 law enforcement of those features and the impact 

15 on privacy, including the changes, if any, in the 

16 nature or frequency of law enforcement’s inter17 ception of transactional information; and 

18 (C) an assessment of the degree of represen19 tation and involvement of consumer or user or20 ganizations in the standards development proc21 ess. 

22 (c) FCC STUDY.—Not later than 6 months after the 

23 date of the enactment of this Act, the Federal Communica24 tions Commission shall submit a report to the Committees 

25 to which reference is made in subsection (b) that includes 
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1 an assessment of the first 10 years of implementation of 

2 the Communications Assistance for Law Enforcement Act 

3 (47 U.S.C. 1001 et seq.) in terms of the technical standards 

4 development process as it related to that Act; the impact 

5 of that Act’s procedures on the telecommunications indus6 try, on law enforcement, and on privacy; and the Commis7 sion’s views as to what the definitions and requirements 

8 of that Act would mean if applied to Internet communica9 tions. 

10 SEC. 6. EXPIRATION. 

11 This Act shall cease to be effective 3 years after the 

12 date of enactment. 

13 SEC. 7. DEFINITIONS. 

14 In this Act: 

15 (1) VOICE-OVER-INTERNET-PROTOCOL APPLICA16 TION; VOIP APPLICATION.—The terms ‘‘voice-over17 Internet-protocol application’’ and ‘‘VOIP applica18 tion’’— 

19 (A) mean the use of software, hardware, or 

20 network equipment for real-time 2-way or multi21 directional voice communications over the public 

22 Internet or a private network utilizing Internet 

23 protocol, or any successor protocol, in whole or 

24 part, to connect users notwithstanding— 
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1 (i) the underlying transmission tech2 nology used to transmit the communica3 tions; 

4 (ii) whether the packetizing and 

5 depacketizing of the communications occurs 

6 at the customer premise or network level; or 

7 (iii) the software, hardware, or net8 work equipment used to connect users; but 

9 (B) do not include an application that is 

10 used solely for voice communications that both 

11 originate and terminate on the public switched 

12 telephone network. 

13 (2) CONNECTED VOIP APPLICATION.—The term 

14 ‘‘connected VOIP application’’ means a VOIP appli15 cation that is capable of receiving voice communica16 tions from, or sending voice communications to, the 

17 public switched telephone network. 

Calendar No. 812 

108TH CONGRESS 

2D SESSION S. 2281 

A BILL 

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. 

NOVEMBER 19, 2004 

Reported with an amendment