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May 18, 2005

The FCC, VoIP and E911

According to “sources close to the commission” quoted by LightReading, the Federal Communications Commission is about to make a mistake.  Anonymous sources are not having a very good week but hopefully LightReading has been more responsible than Newsweek and understands that “sources” is plural.

These sources tell LightReading that the FCC will rule tomorrow that VoIP providers must provide E911 service within 120 days of the publication of an order that will be forthcoming forthwith.  I will resist accusing the FCC of political pandering or protecting incumbents – at least until I see the order – but it is hard to ignore the fact that consistent E911 service is still not available on cellphones and the FCC has not seen fit to take emergency action there.  According to a recent Wall Street Journal story, one third of 911 calls are made from cellphones.

Here are my recommendations to the FCC in descending order of preference:

  1. Do nothing;
  2. Study the situation;
  3. Require RBOCs to open up their E911 facilities to interconnection at reasonable rates;
  4. Define E911;
  5. Issue a very limited order applying only to services holding themselves out as providing primary landline replacement.

Doing nothing is by far the best option.  As I blogged previously, the marketplace may well force VoIP providers who are trying to displace primary phone lines to offer E911 services.  I won’t get rid of my last remaining Verizon lines until Vonage or one of their competitors offers me full E911.  I’ll drop Vonage in a minute in favor of one of their competitors if that competitor is near equal in other ways and provides full E911.  Meanwhile, I’m saving plenty of money with Vonage.  I don’t need the FCC to stick its thumb on the scales and make my decision for me or deny me the savings I’m getting from Vonage today.  Other people may make their decision differently than I do.  They should also have that right.

If a carrier claims to be providing full E911 and isn’t, there are plenty of existing consumer fraud laws not to mention a hyperactive plaintiff bar and tort system ready to deal with that.  No help needed from the FCC there.

If the FCC DOES decide to regulate as reported by sources, it will impose an obsolete solution based on obsolete technology on IP providers who are working on much better solutions based on new technology.  Although I’ve recommended that some VoIP providers temporarily support the old technology in order to gain market share faster, a regulation REQUIRING that support will be very hard to get lifted even when the need is long gone.  Once a regulation requiring obsolete technology is promulgated, it is easy for the lobbyists for the purveyors of obsolete technology to keep it from ever being lifted “in the name of safety.”

Fortunately for consumers and unfortunately for regulators, VoIP is a worldwide phenomenon.  The apparently fastest growing provider, Skype, does not have a US presence.  Canada has just taken an enlightened approach to both VoIP and the 911 safety issue.  An FCC order as rumored will slow down some of the benefits of VoIP in the US and possibly between the US and some other countries.  It will handicap US-based competitors.  But the world won’t wait for us.  It is not a good idea for us to tie one hand behind our backs in global competition.

The FCC may feel that it under great political pressure to do something since some there have been a few stories of 911 problems suffered by VoIP users lately (see Om Malik’s post) and some state attorneys general are taking action.  If the pressure is unbearable, they should turn to the time-honored political expedient of “studying the situation” in hopes that political pressure will abate during the study.  They might even learn something.  But even a study is worse than doing nothing.  It will cost innovators lots of time in testimony and money in lobbying to make sure a study is not a forum for those who’d just as soon slow down change.

The facilities which are needed to provide today’s E911 are usually run by the regional phone companies.  It is possible that the FCC does have to rule to assure that these are open in a nondiscriminatory manner to the competitors of these regional phone companies and at a reasonable price.  Somewhat incredibly, the LightReading story says that, although the VoIP providers will be required to provide the service, the FCC is not going to require that the facilities they need be opened to them by their competitors.  How would you like to negotiate with your local phone company for access to a facility which an FCC rule is requiring you to use in 120 days in order to compete with that same phone company?  I’m not recommending that the FCC require this access be provided if it doesn’t force VoIP providers to need it since I haven’t seen any evidence that the local phone companies are denying or overpricing this access today (they may be and I just don’t know it).  But one-sided regulation would be an even worse idea than even-handed regulation.

If the FCC feels it absolutely must do something to protect consumers, it could provide a definition of what E911 is supposed to be.  This wouldn’t mandate that VoIP providers offer E911, just that the term be defined so that a consumers understand what they are and aren’t being offered.  The trouble is that any definition is likely to enshrine obsolete or about to be obsolete ways of providing the service but better to do that in a definition than a regulation.

If the FCC absolutely can’t resist the urge to regulate, it is very important that the scope of its regulation be clear and narrow.  VoIP service offered from a computer is NOT a replacement for primary line service; it is a way to combine calling with other services AND save money.  When I used computer-based VoIP, I am usually in a hotel room avoiding outrageous hotel phone surcharges.  I have no expectation that my computer “knows” where it is and would be capable of passing along that location on a 911 call.  Absolutely no excuse for regulating that.

With existing technology, VoIP providers who want to support location-based VoIP need to ask users to specify their location.  This is necessary because VoIP service, unlike traditional landline service, can be used wherever you are.  The provider doesn’t know where you connected your VoIP phone today.  Portability is an advantage of VoIP phones; too broad an FCC order could deny consumers that benefit and force us to continue to buy multiple lines from traditional phone companies wherever we go and to have multiple numbers if we’re in multiple locations.

I hope LightReading’s sources are wrong.  I would love to point back to this post as an example of me being Chicken Little.

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