VoIP Regulation 2.0

Jeff Pulver has been a major driver of VoIP promotion with a vertically integrated marketing machine and a global-scale vision. For this, it is understandable why he is sought after to participate on so many advisory boards.

However, given the reaction by some writers in the blogosphere, I think folks need a little bit better perspective on the Cabinet decision to send the CRTC’s VoIP Decision back for reconsideration.

Jon Arnold suggests that in 2004, Jeff told the CRTC to let market forces rule in order to drive ‘a highly competitive, innovative market, that in turn [would lead to] driving rapid adoption of VoIP.‘ If that is what Jeff was suggesting, it did not come across clearly, and it ironically seems to be in contrast to his current drive to have market forces set aside in order to have government regulation ‘Save the Internet’.

My reading of the pulver.com written submission to the original VoIP proceeding found that it cited two core principles:

  1. do not regulate unless necessary; and,
  2. ensure that no entity can leverage its market power to stifle choice and innovation.

Good principles. Bell would agree with these. Certainly the authors of the TPR report would agree. I think that even the CRTC agrees with those general views. The submission pulled out the big guns, stating that NAFTA obligates Parties (read that as ‘Canada’) to ensure that incumbents don’t wield their

monopoly position to engage in anti-competitive conduct… such conduct may include cross subsidization, predatory conduct and the discriminatory provision of access to public telecommunications transport networks or services.

In other words, the CRTC’s original VoIP Decision agreed with Jeff’s original filing. The incumbents were subjected to regulation in order to ensure that they didn’t use their market power to do all the things pulver.com’s submission was worried about. Which is it? Did cabinet side with Jeff or did Jeff side with the Commission? The submission was not really clear.

As Jon mentioned, Pulver’s oral testimony was not well received by the Commission:

Your written brief and your oral presentation had a rather high level of generality and to say possibly at a generic level and they don’t touch the ground of our public notice at very many points on this specific issue.

Jeff was asked if he was ‘familiar with our current sort of regulatory framework in terms of how we regulate… our broad approach to regulation of local competition?‘ Jeff’s reply?

It was suggested to me that you regulate based on other peoples’ reactions, you ask them to come into a situation and react, so you are reactive rather than proactive.

Yep. That’s Canadian regulation. Barely a step above good ol’ boy, ‘Smokey and the Bandit’ style justice. Up here in Canada, we just regulate based on which ways the howling winds are blowing, eh? Throw the combatants into an arena and see who yells the loudest. Hmmmm. And you were wondering why he might have felt a bit of a chill?

Jeff was not ‘the lone American invited to come up‘ to the CRTC’s 2004 VoIP hearings. Actually, like everyone else at those (and most) hearings, he asked the CRTC if he could speak, not the other way around. AT&T; and Vonage were also American speakers at the hearings, bringing global perspectives and similar ‘hands-off’ messages.

A suggestion for Voice 2.0 advocates wanting to have their viewpoints heard: as painful as it may be, you will need to remember that regulation needs to be backward compatible – covering all the legacy services as well as those pesky social issues.

My proposal was in one of my weekend postings. The CRTC needs an answer by Labour Day. If you had a magic wand – how would you help the CRTC craft a response to the Minister?

Revenge of the nerds

Sunday’s Toronto Star had a front page feature describing software called Psiphon, from the so-called Citizen Lab at University of Toronto. The software is designed, in theory, to help people in oppressive regimes circumvent national restrictions on free access to content by more easily offering proxy servers on the outside.

It is an interesting piece of ‘hack’-tivism. Not really news (the Globe and Mail carried a story about Psiphon in February). In some ways, I suppose that the intent of the software is a modern day equivalent of Radio Free Europe – spreading the word of democracy by opening up communications.

I’d like to look at an unintended consequences of this initiatives. Will Psiphon help spread child exploitation images? Do folks at the Citizen Lab believe that images of children should also be free of any restrictions in their transmittal on the internet or does the Citizen Lab agree with the concept that freedom to communicate can have some restrictions?

Michael Geist is quoted in the Star article saying “There are international instruments that override even sovereign governments, such as the Universal Declaration of Human Rights.” Let’s not forget there are also international instruments that restrict freedoms, such as the Convention on Rights of the Child statements on child exploitation images.

As a father of young children, perhaps the director of the Citizen Lab, Ronald Deibert will turn some attention to the issue of reasonable limits on internet freedoms.

Illegal Content on the Internet isn’t clearly defined. We’ll be examining the issue in a special session at The Canadian Telecom Summit next month.

Piling on

Other than the post office, is there another government institution that consistently attracts such public attention as the CRTC? In fact, only the Toronto Maple Leafs are subjected to more arm-chair coaching, although the Leafs are far more likely to benefit from wisdom-juice inspired commentary.

As many readers know, I have not always agreed with the CRTC’s outcomes, but it is unfair to characterize the decisions with the type of mean-spirited attacks that have become popular by some of the harshest critics. In particular, it doesn’t help the debate to be name-calling in refering to decisions as coming from “illiterates” and I think it is naive to believe that “it is impractical to regulate Internet-based services.”

Internet-based services can be regulated and should be regulated, where the public interested is best served by doing so.

It is far too easy to dismiss the fact that considerable thought and analysis goes into CRTC decisions. The Commission has operated without the kind of policy direction from the Government that is called for in the new post-TPR environment; in the meantime, the CRTC has adopted a policy of supporting choice as means to achieve the greatest consumer benefits.

The cabinet direction to the CRTC for a review of the VoIP decision is a signal that we are going to see changes – and likely a signal that many of the TPR recommendations for structural changes are coming soon. We’ll be listening to the Minister provide the direction at The Canadian Telecom Summit next month. Until then, go ahead and be critical. Complain, moan and whine.

But remember, there are at least 3 sides to every issue in front of the CRTC. It is pretty rare that the right answer is as obvious as some of the partison commentators would have you believe.

Who pays?

Among the themes being explored at this week’s telemarketing Do Not Call List hearings in Ottawa were ‘who pays’ and ‘how do we charge’? Do you think there will be a charge to people who want to be added to the list, after all, aren’t they the real users, like people who want to have an unlisted phone number?

When it comes to upgrading the emergency service bureaus for 911 calls from VoIP phones, we keep hearing the question of ‘who pays’? Do you think it should be the police departments?

Broadband service for rural markets? Who pays? Should it be telephone subscribers in the cities or regional economic development agencies?

See the trend? In the past, the telecom service providers were able to be a source of social welfare funding. After all, in a fully regulated, non-competitive environment, phone companies could easily act as Robin Hood to do all sorts of good deeds without any impact to the shareholders. Those days are gone.

Despite best efforts to continue to have various forms of cross-subsidies funded by a wider array of competitive service providers, there are too many types of service providers that are able to avoid contributing.

How do we create fair funding?

How to regulate VoIP

For more than 3 years, in our discussions around the world, the first question that used to be raised was ‘can you regulate VoIP’? After all, internet technology was considered to be beyond the power of regulators.

After we assured people that there were ways to detect and impose regulation on VoIP, our question back was ‘why would you want to regulate VoIP’? Even when offered by an incumbent, what characteristics are there to justify regulating Voice over IP?

More than a year ago, we offered a solution to the regulatory challenge of how to deal with VoIP. That paper is just as relevant today as it was last year. In the report, we suggest that dial tone service is an application that can be dissociated from the access facilities.

The paper suggests that the key factor for the regulator to examine is whether the access service is competitive or a bottleneck, regulated service. Economic (price) regulation is only required if the customer delivered service combines a regulated access service with the voice application. Using this standard, wireless services and VoIP would be forborne while traditional voice services would attract price regulation until access facilities are found to be competitive.

We wrote the paper as a solution for the CRTC to consider last year. Given the Cabinet direction to revisit the CRTC’s original VoIP Decision, we think our paper is worth looking at again.

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