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Will Telephony Regulators Lose Their Teeth With VoIP Adoption?

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There’s an interesting bill finding it’s way through California’s legal system these days. The bill is known as SB 1161 and it has sailed through California’s legislature and now sits on the desk of the state’s Governor, who is expected to pass the bill and put its far-ranging changes to the way the country’s biggest state regulates its telecom industries. Opponents of the bill say it will remove all the power telephony regulators currently have and, at the same moment, remove many of the protections consumers currently enjoy. Proponents of the bill, primarily the bill’s sponsor AT&T say the bill’s big changes will ensure “internet freedom” for the future.

How can opponents and proponents of this one bill come to such vastly different conclusions?

What does “internet freedom” have to do with a deregulating bill being pushed by one of the country’s biggest and oldest landline telephony oligarchs?

And who, exactly, is right about this bill’s true nature?

Tying the Landlines to the Internet

We’ll answer all the above questions soon enough, but let’s start with the most perplexing of these questions- why AT&T is lobbying a telephony bill on the grounds of “internet freedom.”

AT&T argues that SP 1161 has to do with ensuring the freedom of the Internet because the bill basically seeks to deregulate VoIP (Voice over Internet Protocol) technology and to make sure the California regulatory boards take a hands-off approach to digital telephony communications. So far California’s regulatory boards have taken this sort of loose stance on VoIP and SB 1161 wants to ensure that the state’s regulatory boards are forced to do so.

How can a bill force regulatory boards to keep their hands off an emerging telephony technology? By reducing or outright removing whatever rights that board currently has altogether. By saying that regulatory boards can’t do their job to, well, regulate the technology and by codifying that commandment into law. By taking away regulatory body’s teeth and leaving them powerless to tell telephony companies, like AT&T, how they can and can’t run their networks.

Does California’s Government Even Want to Regulate VoIP?

This is a tough question answer.

On the one hand, California’s government hasn’t done a whole lot to regulate VoIP. When AT&T argues that SB 1161 simply attempts to ensure the continuation of California’s current attitude and history of actions (or inactions) towards VoIP the telecom giant isn’t being entirely false. California has kept its hands off VoIP, and as far as VoIP is concerned SB 1161 isn’t preventing these regulators from doing much of anything they seem to want to do. SB 1161 isn’t blocking or banning powers California regulatory bodies are currently exercising on VoIP.

On the other hand, VoIP technology (should I say, mass VoIP adoption?) is still relatively young and it hasn’t been adopted by a truly wide segment of the state’s population just yet. Furthermore the major telephony companies, like AT&T, haven’t really thrown their hat in the VoIP ring just yet. The major telephony companies will likely transition their home phone or mobile phone networks to VoIP sometime in the near future, but they haven’t done it yet. It’s entirely possible California’s regulatory bodies haven’t started taking a serious look, and started enacting serious measures, against VoIP because it isn’t on their radar quite yet.

AT&T, and SB 1161’s other sponsors, are likely doing their best to cut these regulators off at the pass, to make sure they don’t have any skin in the game well before the major telecom companies decide to transition their services to full-on digital.

At least that’s what opponents of the bill are saying, in addition to a whole lot more.

As soon as the major telephony companies began rolling out VoIP California’s regulatory bodies would likely start imposing on VoIP the same sort of strictures they currently impose on copper landline networks. Regulators would likely require VoIP providers follow a whole lot of standards we currently take for granted, but whose future SB 1161 would throw into doubt. These standards include:

  • Setting requirements for basic service quality.
  • Setting requirements for basic line maintenance standards.
  • Setting requirements for waiting periods for installations and repairs.
  • Setting requirements for response to outages due to natural disasters.
  • Setting requirements for the sorts of qualified technical workforces the telephone companies need to employ and keep on standby to restore service in a quick manner and to ensure networks remain reliable. In addition to causing problems for clients this could potentially eliminate many high-paying jobs from the economy.
  • Requiring adherence to standards for Universal Service, like those set down in the USF.
  • Requiring service to rural or low-income communities.
  • Requiring fast connection times.
  • Requiring telephony services such as 911.
  • Having a body that can respond to and take action on consumer abuses by the major telephony companies.

This is a serious list of telephony standards currently in place not only in California, but in pretty much the entire United States. If SB 1161 passes it could very well prevent major telephony companies like AT&T from providing them, or at least from providing them with any regularity, reliability, or sense of equanimity. If SB 1161 passes it would allow for massive cost savings down the line for AT&T and its cousins in the telephony trade, but those cost savings would come at the expense of a standard level and spread of service, argues the bill’s detractors. While SB 1161 wouldn’t do a whole lot to change the way telephony companies currently operate, it would ensure the VoIP-led future of telephony, a future that isn’t so far off, would operate in a totally deregulated state, one in which the major telephony companies could pretty much do whatever they want, whenever they want, to whomever they want.

Is It Really That Serious?

The likely passage of SB 1161 needs to be taken pretty seriously. It won’t really change the way smaller, independent telephony companies and VoIP providers operate, but it will give the big telecom oligarchs, like AT&T, free rein to cut or degrade service and to continue to charge their inflated prices. Furthermore, passage of SB 1161 may have pretty profound implications on not only home phones, but also on cell phones, as mobile devices are likely to jump on the VoIP train sooner rather than later. If VoIP is totally deregulated than that means the future of mobile telephony technology is going to be deregulated. And that’s kind of scary considering the way modern regulated telephony mobile providers already abuse their customers.

Isn’t This Just a Bill for California?

Yes, for now. At the moment SB 1161 only applies to California. But AT&T and the other telecom oligarchs are putting similar bills up in many other states, including Kentucky, New Jersey, Virginia and Texas, to name a few.

And even if the telecom oligarchs weren’t already putting their weight behind bills in other states the passage of SB 1161 would embolden them to do just that. Not only would the passage of SB 1161 give AT&T confidence to push hard for similar deregulatory measures in other states, but it’s passage would set a big, big, big precedent that would guide the decision of each of those state’s legislative bodies, in addition to the federal government’s legislative bodies. California is a big state and its population accounts for nearly 20% of all people living in America. If SB 1161 passes in California you better believe it will pass elsewhere and will quite possibly find its way to a favourable position on the federal floor.

 

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