FCC cautious on Voice-over-Internet regulation
LAS VEGAS, Nevada (Reuters) -- Rapidly expanding voice communications over the Internet should be protected from excessive government regulation and from being pigeonholed as simple phone service, the Federal Communications Commission chairman said Friday.
Michael Powell, speaking at the huge Consumer Electronics Show here, said the commission needs to do more work in 2004 on promoting and expanding high-speed communications over the Internet, which he said is crucial to the economy's future.
"I think it is the most dramatic and meaningful stimulus to our economic productivity and growth," he said. "I think it is the most promising development for job creation."
Powell was most vocal about the technology known as voice over Internet protocol, or VoIP. Companies like privately held Vonage and Skype have seen rapid growth in recent months as people embrace low-cost -- even free -- voice communications online with quality comparable to traditional phone service.
The FCC chairman said harm from misregulation of VoIP could take "decades to fix."
"You [can] create a very hostile regulatory environment for voice-over-IP providers in the United States," Powell said.
He added "there is nothing to stop" the companies from moving to other countries and setting up computer systems to serve U.S. customers.
A major danger, he said, is people saying "'oh VoIP, it's just telephony. It looks like a duck; it quacks like a duck; regulate it like a duck."'
Last year, the state of Minnesota tried to impose telephone regulations on Vonage, a leader in the VoIP business that lets a user hook up a regular telephone to a special adapter and in some cases even keep their traditional phone number.
But a federal judge ruled in October that Vonage was an information service rather than a telecommunications service, and that state regulation of it would run counter to congressional intent to keep the Internet free of regulation.
"We should be starting on the cleanest slate possible," Powell said. "I don't think you should ask a Vonage ... to hire an 80-person lobbying staff and legal staff."
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