Congress to Focus on Telecom Reform in 2005

Telecommunications reform, including VoIP deregulation, expected to top 2005 Congressional agenda.

Grant Gross, IDG News Service

WASHINGTON--As the U.S. Congress gears up for its 2005 work following Thursday's presidential inauguration, reform of the rules governing telecommunications competition promises to be a top priority.

Other technology-related issues, particularly digital copyright, are likely to come up during the year. But tech-savvy lawmakers and tech-focused committees will spend much of their time working on changes to a 9-year-old law that regulates wireline-based telephone services, predict lawmakers and congressional observers.

Critics of the Telecommunications Act of 1996, including several lawmakers and some telecom trade groups, say growing Internet-based services like voice over Internet Protocol have rendered the law largely obsolete. Backers of telecom reform say it's time to update the law, which focused on promoting competition among wireline carriers, to factor in Internet-based services.

"We need to have the first legislative enactment for the new era of telecommunications," said Representative Rick Boucher, a Virginia Democrat. "The Internet has been treated in an ad hoc way for the past 10 years."

VoIP Issues

In a November ruling, the U.S. Federal Communications Commission exempted Vonage Holdings' residential-focused VoIP service from state regulations. But some lawmakers pushing bills to deregulate VoIP and other Internet applications say a more comprehensive approach is needed.

Congressional deregulation of VoIP could create a "boon for consumers" and a new era of competition, said Senator John Sununu, a New Hampshire Republican who introduced his own IP services deregulation bill in 2004. "If we get this right, if we create a clear framework for IP services, then we'll create a very good incentive for investment and innovation," Sununu said in an interview. "We owe it to industry participants and consumers to provide clear rules of the road."

Others, including major telecom trade groups, have called for a major overhaul. The 1996 Act established a set of rules in which the incumbent owners of much of the nation's telephone network infrastructure--four companies often called the regional Bells--were required to share parts of their networks with competing carriers. After a series of rulings by the FCC, neither side is happy with the results.

The United States Telecom Association , representing facilities-based carriers including the incumbent Bells, argues that rules requiring the incumbents to share their networks aren't needed anymore, because consumers have a variety of choices, including VoIP and competing carriers that purchase access from wireline wholesalers.

"We advocate that where there's competition, there's no need for economic regulation," said Allison Remsen, spokeswoman for USTA. "There's plenty of competition out there."

Special Services Issues

Groups such as the Consumers Union and the National Association of Regulatory Utility Commissioners are likely to press Congress to keep some telecom regulations intact. Consumers Union has advocated that the FCC address issues such as 911 emergency service requirements for VoIP providers.

NARUC has argued that state regulators should play a role in ensuring that VoIP providers offer services for the hearing disabled and 911 services. The regulators also seek to fine-tune the incumbent network-sharing rules in their own states. NARUC officials argue that state regulators are closest to the disputes among phone carriers and between carriers and customers can best deal with those issues.

States should also have a role in requiring carriers to provide affordable access to customers in poor and rural areas, NARUC argues.