The threat of regulation, to one degree or another, often seems inevitable for the VoIP market. This wasn’t always the case. In the very early days of VoIP it seemed like the communications technology would remain independent of governmental interference, largely due to its net-based nature. Yet as VoIP use grew over the years, and as it became increasingly clear how big a player VoIP was going to be in the larger telecom market, the notion of regulation began to seem more and more inevitable and, to some people, more and more necessary to ensure the normal, everyday telecommunications technologies of the future continue provide reliable service and access to emergency services, to name just a few avenues of concern for VoIP users and potential regulators.
Continued from “Just How Big Will VoIP Market Grow (Part 1)“
Falling price point primed to match consumer expectations isn’t the only reason Point Topic believes the global VoIP market is due to hit 40 billion dollars in annual revenue by the year 2015. After all, ideas of substitution commodities and ideal price points are a little academic, a little theoretical, and they don’t quite bring the hard-nosed proof that the global VoIP market is set for some big, big changes over the next couple of years. For that sort of proof, Point Topic looked at an area they considered an important “test bed” for rolling out the technology.
Back in 1996, it was still possible for telecom companies to split their service plans into a number of different revenue streams. Telecom companies were able to say, with total specificity, how much of their revenue came in from international calls, how much of their money arrived from beeper use, how much money they had coming in from local calls, and yes, how much end-user revenue they earned from interstate communication. Telecom companies could do this because these providers tended to charge based on specific usage. Each time you wanted to communicate with someone interstate you had to pay to do so, creating a firmly defined revenue stream that was easy to track, add up, and, yes, tax for the sake of bulking up the USF.
Nice Pricing Models = New Taxation Headaches
With the massive explosion of mobile devices fewer and fewer telecom providers continue to charge their customers based on usage. At least usage that’s as specifically defined as it was back in 1996. These days pricing tends to follow the model of flat-rate pricing, which basically states “a call is a call is a call is a call.”
Local calls and interstate calls now cost the same amount of money. And that’s to say nothing of the various other simplified payment plans that really mess with the idea of the USF’s tax plan. How can you accurately tax interstate communication if it’s included within an unlimited calling plan? How much of the cost of an unlimited calling plan’s price goes towards providing interstate communication?
Federal legislation played a huge role in the formation of the country’s telecom industry. Today, new bills and acts passed by the U.S. Government continue to shape the present and future of our field. One of the biggest acts to pass over the last couple of decades was the Telecommunications Act of 1996. This act represented the first major overhaul of the U.S. telecom field in over 60 years. It basically set the shape of the modern communications industry. This was the first act to take the internet into consideration. Yet even though the Telecommunications Act of 1996 was prescient in some ways it failed to predict one of the biggest changes in the telecom market. Over the last 15 years, flat-rate calling plans spread all over the U.S. Nowhere is this oversight more apparent than the formation of the Universal Service Fund (USF).
Communications is a tightly controlled industry in the U.S. With new hosted PBX technologies, some issues have cropped up that caused the FCC to run into a snag when it comes to properly regulating them. Some of these might seem like simple semantics, but even something as minor as figuring out what to call a hosted PBX service can snowball into something more serious.
Look at it this way- there are separate regulations for information services and telecommunications services. Information services, like the internet, are not as tightly regulated as telecommunications services, like telephone services. So… how should regulators qualify Voice-over-IP systems? They’re essentially a telecommunications service, but one that relies on the internet. Do calls made over the internet qualify as phone calls, or as internet data content? Calling them an “internet content” would make internet-based phone services subject to far fewer regulations than traditional phone services. Needless to say, VoIP service providers are pushing for an information services classification, while traditional phone companies are lobbying for a telecommunications services classification.
1835, “apparatus for signaling by musical notes” (devised by Sudré in 1828), from Fr. téléphone (c.1830), from télé- “far” (see tele-) + phone “sound” (see fame). Also used of other apparatus early 19c., including “instrument similar to a foghorn for signaling from ship to ship” (1844). The electrical communication tool was first described in modern form by P.Reis (1861); developed by Bell, and so called by him from 1876. The verb is attested from 1878.
Voice over Internet Protocol (VoIP) has become a mature technology that allows individuals to place phone calls using the Internet Protocol. VoIP utilizes the Internet infrastructure to make voice and video calls as opposed to the traditional public switched telephone network (PSTN) that has been in place for more than a century. VoIP service is less expensive to provide and operate as compared to traditional telephony. Another advantage of VoIP is that a subscriber can make a voice or video call from any global location with a broadband Internet connection. Modern VoIP telephony evolutionizes the boundaries of telephony by adding voice, presence management, chat and other services and by then embedding it into many business applications that are run on computers.