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New Technologies Need Guidelines

Digitization and Internet Protocol — in essence, the language of the Internet — are driving a simple, but fundamental principle governing advances in technology today: a bit is a bit. Traveling America’s broadband networks at any given moment are billions of voice bits, data bits and video bits — each with no structural or technical difference relative to one another. This devolution of global communications into a universal, interchangeable format is known as Everything over Internet Protocol.

As the long talked-about communications convergence moves forward, Congress must craft clear rules for the offering and provision

of EoIP. Accordingly, I am preparing legislation that will establish regulatory guidelines for EoIP providers and ensure open and competitive networks. A document will be available for discussion with Members and stakeholders by early summer.

By its very structure, EoIP ignores preconceived notions about communications technology. Various broadband technologies, such as DSL, fiber, wireless, cable and power lines, serve as mere channels for the transmission of EoIP packets. This is because at its very core, EoIP is simply an assemblage of IP applications, either operating separately or in tandem. While IP voice, video and data applications have been in existence for years, only recently have they begun to converge to create multi-service platforms on a range of consumer devices from cell phones to set-top boxes. This technological convergence, in turn, requires a convergence and uniformity in our regulatory approach as well.

Standing in the way of progress is nothing more than an unwillingness to make essential decisions and to recognize that America’s communications laws are inadequate to deal with EoIP. The Communications Act of 1934 and other related laws are based upon an old, compartment-style service model. Take the most basic IP issue debated last year: should Voice over Internet Protocol be regulated at the federal or state level? In retrospect, this question already appears dated. Packet-based technologies simply do not stop at imaginary borders designed to fit geographic or political purposes.

Given the structure of existing communications laws, more perplexing questions await. Does an IP application that offers voice, data and IP video fall within Title I, II and VI of the old communications law? Should an IP video application be forced to obtain a local franchise agreement in some effort to maintain parity with the cable model? Should IP data or Internet access be required to contribute to universal service? Do these service categories and distinctions even apply in today’s technological environment?

Moreover, the Federal Communications Commission appears unable to step aside and let the marketplace meet the demands of consumers. After some positive decisions — like that on, which declared parts of VoIP information services off limits to many regulations, and in the Vonage order — the FCC has shown itself to be handcuffed, partly by statute and partly by indecision. In recent rulings involving portions of EoIP, the FCC has declared that it was unable to take an affirmative step to pre-empt existing FCC rules because it was unclear whether those rules even applied in the first place. Such circular reasoning is counterproductive. Providers should not have to guess whether they are required to comply with FCC rules.

The impact of indecision is enormous. Significant capital resources remain on the sidelines waiting for clarification of these regulatory obstacles. In many instances, the vague legal and regulatory picture produces a volatile level of risk, slowing action by creditors, venture capital funds and financial institutions. As money tightens, proposed business plans that could take EoIP in a completely new direction are discarded. An uncertain landscape also encourages EoIP providers to locate offshore as this technology is not proprietary property of U.S. firms. Imagine trying to encourage law enforcement cooperation or universal service payments on a provider residing half-way around the world with little to no ties to the U.S. regulatory structure and no technical ability to limit their transmissions. Moreover, we must recognize that IP applications have been the “killer app” for broadband deployment. Disruption of this catalyst will have a major impact on expanding access to broadband services.

My legislation will build upon the philosophical underpinnings contained in “The VoIP Regulatory Freedom Act” (S. 2281) as introduced last year. Specifically, we must address the jurisdictional aspect of these applications. Notwithstanding the FCC’s work in the Vonage order, a handful of states have sued to prevent that ruling from going forward. Such a fragmented regulatory approach by state and local regulatory authorities would stifle further advancement. Finally, it is imperative that we tackle the areas of the so-called social obligations, taxation, and the interrelationship with existing providers. This must be done in a way that treats all IP applications as similarly as possible. It is also important that we consider the treatment of new IP broadband platforms used to transmit EoIP.

Critics may argue that efforts to address EoIP are mistaken because in time IP will be surpassed by a new technological evolution. It’s true that there is no guarantee that EoIP will survive the test of time; but by addressing EoIP now, the next technological advance will have a straighter and clearer path to follow.

Technology does not wait for Congress. With or without action this year, technology will move ahead. The burden put to elected officials is whether we are prepared to provide clarity and certainty so that the speed of that progress is not artificially stunted.

Sen. John Sununu (R-N.H.) sits on the Commerce, Science and Transportation Committee.

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