WASHINGTON — State regulatory agencies would have no authority to regulate
or tax communication services delivered over the Internet, including Voice
over Internet Protocol (VoIP) telephone traffic, under legislation proposed
Tuesday in the U.S. House of Representatives.
The authors of the legislation — Representatives Rick Boucher (D-Va.) and
Cliff Stearns (R-Fla.) — admitted the legislation stands little chance of
passage in Congress this year. Their real intent, they said, is to set the
regulatory definitions for a major overhaul of the 1996 Communications Act
in the 109th Congress, which will convene in January.
“[We] are seeking to frame the debate over advanced Internet communications
regulation, including VoIP regulation, in anticipation of a larger
telecommunications overhaul in the Congress beginning in 2005,” Boucher
said. “By suggesting basic ground rules today, we are hoping to make a
substantial contribution to the rewriting of the [Telecommunications Act].”
The Stearns-Boucher bill, known as the Advanced Internet Communications
Service Act of 2004 (AICS), would define all IP-based communications as
interstate services subject to the exclusive authority of the Federal
Communications Commission (FCC).
The approach marks a major departure from current law with its focus on
regulating industry sectors without regard to the services they offer. Under
FCC rules, the incumbent Bells are considered “telecommunication providers,”
while cable companies are classified as “information services.” Each follows
a separate set of rules although both groups are increasingly offering the same
Under the proposed legislation, the same regulations would apply to all
Internet platforms over which IP-based services are offered.
“Our goal is to treat all advanced IP applications, including VoIP, with a
light regulatory touch. Since every Internet user who is equipped for
advanced services will have a broad choice of service providers, the
services will be highly competitive,” Boucher said. “Accordingly, the
regulations which have governed monopoly telephone networks should not apply
to new competitive Internet-based technology.”
If eventually adopted as part of an overall telecom reform package, states
could face major revenue losses. They currently raise hundreds of millions
of dollars by taxing analog telephone services moving over the legacy Bell
networks. As the telecoms and cable companies join startup ventures like
Vonage in converting that traffic into digital data packages moving over the
Internet, states have moved to tax VoIP in the same manner as analog
The legislation specifically bars both the FCC and states from regulating
the rates, charges or terms for any Internet-based voice, data, video or
other form of communication that is sent or received over an IP
architecture, no matter the provider.
The bill further limits FCC authority over VoIP services to E-911 issues,
disability access, universal service funding and access fees when VoIP
traffic intersects with the legacy telephone network.
“The same regulations will apply to all Internet platforms over which
Internet-based services are offered, whether the platforms be operated by
telephone companies, cable companies or other providers,” Boucher said. “The
enactment of this provision would place in law the valuable concept that all
providers of similar services be treated equally from a regulatory
Stearns called advanced Internet communications services a “killer service.
One that can provide all the communication, information and entertainment
applications with less effort on the side of the consumer. VoIP is a
tremendous, market-changing application, but it is just that — an
He added, “As we move forward in debating changes to the Telecom Act, we
should be mindful that we examine the provision of services, not each
The Stearns-Boucher bill does not address the issue of wiretap accessibility of
IP-based networks. Stearns said the issue would be addressed in a separate