Tauzin Presses FCC for VoIP Decision

Rep. Billy Tauzin (R-LA) wants to expedite a Federal Communications Commission (FCC) decision on whether access charge rules apply to long-distance calls carried over the Internet.

More than a year ago, long-distance carrier AT&T challenged the fees it must pay for delivering calls using Voice over Internet Protocol technology to traditional local carriers.

VoIP providers route calls from leased local telephone lines to a gateway server that converts analog voice into data packets. From there, the data packet moves over the public Internet or a private backbone to its destination, where it goes through another gateway that rolls it over to a local line. VoIP providers say they don’t traffic in voice packets and shouldn’t be charged the fees.

Access fees charged to long-distance carriers are a major revenue source for the regional Bell operating companies, who charge approximately half a cent for every call connected to their local lines. AT&T says those fees amount to $9 billion a year.

AT&T has refused to pay access fees to SBC for the last 15 months in order to force the FCC into making a decision.

Although it is widely expected that the FCC will rule on AT&T’s request in the next few months, Tauzin sent a letter to FCC Chairman Michael Powell on Thursday requesting the agency to determine by Feb. 5 if “access charges apply to long-distance voice calls that AT&T transports” over its IP backbone.

“The [AT&T] petition did not ask the Commission to change its current rules — it simply asked the Commission to state what its existing access charge rules require today,” Tauzin wrote to Powell. “Yet, 15 months later, the Commission has failed to answer this straightforward question.”

Tauzin, chairman of the House Energy and Commerce Committee, wrote that he is “extremely concerned that the Commission’s continued failure to clarify the rules governing traffic over AT&T’s IP backbone could jeopardize our ability to keep telephone rates in rural areas affordable.”

VoIP technology creates a quandary for regulators because the new industry doesn’t fit traditional telecom regulatory models. While it clearly provides telephone service, it does so over the virtually regulation-free Internet, both public and private, instead of the heavily taxed and regulated public switched telephone networks (PSTN).

As telecoms and cable companies join startup VoIP ventures in moving voice traffic over the Internet, the regulatory issue becomes critical for cash-starved states that raise hundreds of millions in revenues by taxing traditional telephone services.

State public utility commissions are already targeting Internet telephone companies as future sources of revenue.

In the only court decision so far, a federal court in Minneapolis spiked Minnesota’s attempt to regulate and enforce a tax on broadband phone company Vonage, ruling that the VoIP firm did not have to register as a telephone company in order to conduct business in Minnesota.

California, Washington, Oregon and Florida are also considering litigation against Internet phone companies on the same issue.

The FCC is also considering a petition by Free World Dialup, whose calls are routed entirely over the Internet, seeking a total exemption from FCC imposed fees since its traffic never touches the legacy Bell infrastructure system.

In addition to the AT&T and Free World Dialup petitions pending at the FCC, the agency began proceedings in December to determine what, if any, telecom taxes and rules should apply to VoIP technology. The proceedings are expected to take at least a year with the first proposed rules expected to be issued in February.

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