Kevin Werbach
Remarks to FCC VOIP Forum -- December 1, 2003
(As prepared for delivery)


Good morning, Mr. Chairman and Commissioners.   It's a pleasure to be back at
the FCC, and especially a pleasure to be discussing Voice Over IP.  If you
read the popular press, you would think VOIP just recently burst on the scene.
Yet not only has VOIP been around for nearly a decade, it has been under
consideration at the FCC for almost that entire time.  Seven-and-a-half years
ago, a group called ACTA filed a petition asking the FCC to ban unregulated
VOIP.  The Commission was absolutely right to decline ACTA's request -- and
subsequent invitations -- to impose the full panoply of traditional telecom
regulation on a nascent technology.

However, it's no longer 1996.  Where once the threat was unjustified FCC
action, now it is FCC inaction.  If the Commission does not squarely confront
the questions VOIP raises, it will inadvertently allow legacy regulation and
regulatory uncertainty to stifle competition and innovation.  The reason is
that, again, again contrary to what you might read in the papers, VOIP isn't
just a creative trick to avoid regulation.  It's a reflection of the
fundamental way that communications is changing in a digital broadband world.

[SLIDE 2]
The FCC's traditional regulatory model classifies services into distinct
buckets.  With the introduction of computers into the telephone network in the
1960s and 1970s, a new animal emerged, called data, which didn't fit the
traditional categories.  The Commission responded in the Computer Inquiries by
generally placing data outside the regulatory obligations of Title II of the
Communications Act.  That far-sighted decision created a new space for
innovation on top of the regulated communications infrastructure, opening the
door for the emergence of the Internet.


[SLIDE 3]
In time, the "data" category grew larger and more important.  As all
communications networks have gone digital over the past twenty years, "data"
has increasingly overlapped with traditional regulated services.  Which brings
us to VOIP.  Is it within the unregulated data portion of the circle, or the
regulated telephony portion?  That is the wrong way to look at the problem.

[SLIDE 4]
It's the wrong way to look at the problem because, in a digital world,
everything is data.  The network that delivers Web pages and files can also
deliver voices and moving pictures.  Voice is just one class of application,
which can be implemented in many different ways.  And telephony is just one of
a plethora of voice applications.

In this world, trying to put services into buckets is a hopeless exercise.
The critical issues are interconnection among networks, and openness of
platforms.  For a digital broadband world is a world of layered networks.
Competition and innovation at every layer depend on open connectivity to other
layers, from the physical infrastructure through devices, applications, and
content.

[SLIDE 5]
So let's look at what's happening in the VOIP world today.  VOIP is more than
just services like Vonage and Skype that look similar from a distance to basic
telephony.

•	Telesym PocketPC softphone
•	Webcam using VOIP for Internet videoconferencing
•	Yahoo Messenger voice chat
•	Vocera voice over WiFi badges
•	Pocket Tunes streaming Shoutcast radio (including talk radio)
•	Microsoft Xbox Live with headphones for multiplayer gaming
•	Roger Wilco PC-based voice chat for gamers
•	VOIP for mobile phone push-to-talk functionality

Apply traditional regulatory obligations to these services would make no
sense.  In short, calling VOIP just a new form of competition for telephone
companies is like calling the automobile a fast horse.  It's something
fundamentally different.

[SLIDE 6]
Let me conclude with a few points to help shape our discussion:

Voice is not telephony.  Just because a service delivers voice over
communications networks doesn't mean it should be a subject to legacy
regulation.

In a world of digital internetworking, applications, including voice, are
defined at the edges of networks.  They can evolve outside the control or even
awareness of service providers and device manufacturers.

On the Internet, a packet is a packet.  It doesn't know whether it is
transmitting a chunk of a voice call, a document, or a movie.  Any legal rule
that pretends otherwise will fail.

Finally, innovation happens.  The Commission must adopt rules that are
technology neutral, because otherwise it will find itself scrambling to keep
up with adaptations in equipment and services.

So in conclusion, the question should not be, "What is Voice Over IP?"
Instead, the Commission should be asking what is the purpose of regulating
certain forms of voice communication, and how can it adapt its rules to the
sea-change now occurring as we enter a digital broadband world.