Mad Cow taints Senate VoIP hearing

THE US Senate Committee On Commerce, Science, and Transportation held its very first hearing focusing on Voice-over-Internet-Protocol this week. As the hearings began shortly after 9:30 AM local time, two of its members, the down-to-earth Senator Conrad Burns (R-MT) and Bryon Dorgan (D-ND) ducked out during the meeting for another hearing on Mad Cow Disease. Before departing, Burns offered his apologies but pointed out that his state had "Almost as many cattle as telephones..." With about 2.6 million cattle (or about 3 cows per citizen), plus 18,000 dairy cows, Montana is sixth in the nation for the production of beef.

Despite the early departure of Burns and his colleague, the hearing proved to be a rather sweeping lovefest for technology-fond Republicans and Democrats alike. Senator John McCain (R-AZ) used his introductory remarks to state that the existing 1996 Telecommunications Act was "fundamentally flawed" and seemed to be laying the groundwork for revisiting and rewriting the legislation. "It has been nearly eight years since the passage of the 1996 Telecommunications Act," McCain said in his prepared statement. "In that time, the telecommunications industry, the technology it relies on and the services it all offers have all changed dramatically... And yet, we continue to regulate the telecommunications industry under the confines of an outdated statutory regime that has been rendered largely obsolete by technology."

Senator Maria Cantwell (D-WA), formerly Senior Vice President of Consumer Products at RealNetworks, described existing circuit-switched technology as "dead, like dinosaurs stuck in tar" and pontificated on the need for open standards and interoperability." Cantwell said the FBI likely "already had all the tools it really needs with Magic Lantern ... and Carnivore" to more than adequately wiretap criminals without having to get VoIP providers to add more technology.

Since it is Congress, taxes quickly wandered into the proceedings. Senator Ron Wyden (D-OR), who wants to continue to keep taxes off of (US) Internet business transactions, used his introductory remarks to point out that there had been no collapse of shopping malls due to the lack of Internet taxation. Senator Lamar Alexander (R-TN), the first witness, used the form to bemoan the potential of VoIP calls from depriving local and state coffers of tax revenues; according to the Congressional Budget Office, $20 billion is collected by the States on phone services and service providers, including $361 million and five per cent of the budget of Tennessee.

Other exchanges were held on contributions to the Universal Service Fund. The Universal Service Fund is a U.S. tax collected to provide/subsidize phone service rates for rural and low income areas, as well as a fund for underwriting schools, health care providers, and libraries access to advanced telecommunications services. VoIP calls are currently exempt from Universal Service charges, but phone companies and some state regulators want to find a way to rope VoIP service providers into paying the fees, which they'll just pass along to their customers.

FCC Chairman Powell received a cordial reception from the Committee; some were predicting he'd receive a flogging similar to the one administered by Congress for Janet Jackson's bare breast. McCain and Powell both seemed to be on the same page regarding the ultimate re-write of the '96 Telecommunications Act.

One of two uncomfortable moments occurred when Glenn Britt, Chairman and CEO of Time Warner Cable, got a tongue lashing by McCain for higher cable rates after Britt had bragged how Time Warner had introduced competition into the telephone market via their VoIP service.

CenturyTel CEO Glen Post spent his five minute prepared statement to rant about how all "voice service providers" including Free World Dialup and Vonage must contribute to universal service because they don't pay their fair share to support the underlying telecommunications infrastructure. It was an embarrassing position to hear because A) Customers using DSL or dial-up phone services already pay universal access fees on their monthly phone bill; in essence, they'd be double-taxed or B) Customers using cable-modem based services and/or peer-to-peer don't touch the switched phone network, so they should pay because...? Of course, CenturyTel's service to rural areas means they can dip into the Universal Service trough, er Fund, so charging "Voice Service Providers" extra money means there'd be more money to grab. µ