SUNUNU, PICKERING HOPE FOR VoIP BILLS TO MOVE THIS YEAR

Hurst said the House Commerce Committee staff, which was putting the hearing together, planned to “pull from a broad spectrum of the industry. In our office, we are meeting with every single interest in this debate.” He said Pickering wanted to “hear from everybody,” adding that was “the only way to do a good public policy.” O'Reilly said Sununu’s goal in working on the bill was to ensure that VoIP was treated as an application.

Hurst called for “a correct regulatory regime in place” to encourage VoIP growth. “The main reason we want to get [the bill] out is to clarify the regulatory environment… We think that if Congress gets involved and lays the ground[work], we don’t have to worry what happens at the FCC.” Hurst told us after the event he believed Congress “should be directing the policy… and the FCC should be implementing that. We just want to make sure we get it right and help the FCC do their job.” He said the Commission was “doing what’s right. I think they are going the right way. We just want to make sure they are aware of the concerns of Congress and of the American people as they go forward.”

While “in an ideal world,” the FCC should wait for Congress to complete action, “my feeling is the FCC is likely not willing to wait for legislation,” said attorney Robert Aamoth at a separate panel. Attorney Randall Lowe said the FCC was “hunting for a way not to regulate” VoIP the way it does traditional telecom services. He said “there will be some form of regulation, but I think it will be minimal.” He also said the Commission would probably “preempt the states” from regulating VoIP services. Attorney Jacob Farber said it didn’t matter whether the FCC classifies VoIP as an information or telecom service: “No matter what framework [the FCC defines] there are going to be certain issues that [will require] some regulation.” He said the question wasn’t whether the FCC will regulate VoIP, but “what are they going to do in each discrete area?”

“The length of time it takes to decide the [VoIP] issues will have a big impact on what the ultimate outcome is,” said Aamoth: “Which people will be at the FCC when they issue the final decision? Three years from now it will be one outcome; 6 months from now it will be something quite different.” FCC’s Jeffrey Carlisle said Tues., the Commission was shooting for 2005 in trying to come up with a final order in the proceeding, with some key issues expected to be resolved as soon as this year (CD May 19 p9). FCC Comr. Abernathy’s term is to expire June 2004, Copps’ June 2005, Martin’s June 2006 and Chmn. Powell’s June 2007. But commissioners can stay without reappointment roughly until the end of the next calendar year. Comr. Adelstein’s term expired in June 2003.

“The FCC has a tendency to issue decisions based on politics, ideology and compromise, and then to reverse- engineer the legal rationale,” Aamoth said: “That’s what I think is likely to happen here again.” He said the lessons to learn from that were: (1) “You haven’t won any issue yet.” (2) “You haven’t lost any issue yet. Almost everything is up for grabs. My advice is identify what you want and ask for it.” For example, he said the FCC decision on the AT&T petition on phone-to-phone VoIP service wasn’t the end of the road: “The results may change. If fact, the FCC said [the decision] was interim.” He said “any FCC ‘final’ decision may not really be ‘final.’ Don’t be surprised if the FCC decision partially or wholly is rejected on appeal.” Aamoth said “legal rationale” was “still important because it can be used to veto policy choices and plays a key role on appeal.”

That FCC tendency means “unfortunately, for people especially in the business world, uncertainty and confusion could prevail for years,” Aamoth said. He urged the CLEC industry to “pay attention to preparing a strong record on appeal, and of course, never give up. It’s not over ’til it’s over.” Speakers agreed that one thing CLECs should learn from ILECs was persistence. “They never take ‘no’ for an answer” Aamoth said: “I think [the CLEC] industry needs to be the same way.”

“The FCC may be preparing to create new, nonlegislative paradigms for VoIP regulation,” Aamoth said. He said it was “clear” the Commission had “in mind that if you are an information service, you are still subject to some regulation.” Aamoth said “one powerful tool the FCC has in its arsenal” to establish “new paradigms” was Title 1 regulation. He said while in the past, the FCC was “nervous about using ancillary jurisdiction… the FCC is clearly going to look at a more aggressive use of Title 1 on VoIP.” Another “powerful tool the FCC will probably use is forbearance,” he said: “These 2 tools may allow the FCC to ‘cut and paste’ new paradigms.”

On the universal service fund, Lowe said the Commission was looking at “absolutely everything” in its rulemaking: “I do believe we've got an opportunity to put forward any position we want to put… that is not only logical but is also supported.” Aamoth said it was “clear that the Commission believes the universal service fund is too big.” He said his “sense” was the Commission would be “very careful” to make sure that any change in the definitions that determine the scope and size of the fund are competitively neutral. “I think it’s very difficult to get any kind of a change there that would have any kind of a competitive impact,” putting “more burden” on ILECs, as opposed to CLECs, he said. But he said it was important for the CLEC industry to make sure the USF system is “not number-based.” Aamoth said the Commission would “not consider solutions that ignore USF needs. At the end of the day, the FCC wants to have a viable USF program.”

Aamoth also said there was a tendency for the Commission in some cases to concentrate more on ex partes filed as the decision deadline approached than on regular comments filed. “This approach favors incumbents” who are in a better financial position to take advantage, he said.

“An important thing to remember in the context of E911 when talking to regulators is that IP holds a potential of delivering enhanced emergency services,” said attorney Ronald Del Sesto. For example, he said “in a native IP environment, a native IP PSAP will be able to act as a remote central office for another PSAP.” He said “we don’t really want to damp down IP services to just match what traditional wireline networks can do, since there are so many opportunities to improve the service.” Intrado Vp-Wireline Sales Jim Keenan said VoIP 911 wasn’t just a safety issue, but also a “key competitive differentiator” and a “business driver.” “The winners are those who successfully use 911 to incorporate inherent value of VoIP,” he said.

Sesto said one aspect that “often gets lost very quickly” in the CALEA debate was that “CALEA did not provide law enforcement with any enhanced ability to survey telecommunications or communications products.” He said sentiment at the state level was that if VoIP providers weren’t CALEA-compliant, law enforcement couldn’t do its job. “That is just not the case,” Sesto said: “Surveillance and legal obligations to provide law enforcement with information is [covered] by a separate statute.” He said all CALEA did was set a standard for how law enforcement would receive required information, but “it does not actually get to what your capability is and what your obligations are to provide that information.”