We Should Not Regulate VoIP

March 23, 2012

We were amused by an article that called for continued regulations applied to the VoIP industry.

We find it amusing that one talks about how it would be bad to "deregulate VoIP" when VoIP had not been regulated in the first place. Regulators rushed to go apply regulations to it, largely because it is their job to regulate and because traditional carriers were scared of the competition.

The fact is that deregulated VoIP means that many more companies can provide voice service, as the barrier to entry is lower. There may be risks that emergency services (e.g., 911) will not work properly, but there is little point in keeping an aging system in place as the world moves forward. The emergency systems should be updated and the techies in the industry are trying to make that happen.

There was a concern about revenue to pay for emergency services. Why should it be the burden of voice service providers to pay for emergency services? Oh, that's right — it's not. Who pays that bill? Customers do, at least in the United States. Look at your phone bill and you'll see one or more taxes for these kinds of "service provider" funded services. Revenue for emergency services can easily be addressed with taxes placed elsewhere. Why even put the tax on the phone bill? Because it was convenient. Fact is, everyone benefits from emergency services, so make it a part of state sales or state income taxes.

There was also the claim that the cost of VoIP would increase with deregulation. We could not disagree more with the author. VoIP has lowered prices and with more companies providing services, prices would remain low. In fact, in an all-IP world where legacy PSTN connections are gone, there simply is no reason to charge for a phone call, which is why services like Skype do not.

Regulators need to keep out of the application space, which is exactly what voice and video over IP are. Regulators do not get involved in word processing applications or web development tools. Regulators do not get involved in instant messaging services. Why do they feel compelled to get involved in VoIP? It's hard to let go of the old way of doing things.