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VoIP – Ensuring that the Public Voice is Heard
Report from a Consumer Forum
Voice over
Internet Protocol (VoIP) is a new technology that has the potential to
revolutionize communications by offering voice and other services through
broadband Internet connections. What does this mean for consumers, and how can
we ensure that the public interest is served as this technology is developed
and deployed? Those were the central questions at a National Consumers League[1]
(NCL) forum co-sponsored by the Alliance
for Public Technology[2]
(APT) on More than 50 people participated in the forum from consumer organizations, seniors groups, local, state and federal government agencies, labor organizations, disabilities groups, minority organizations, academic institutions, and communications service providers. While there was general agreement about many of the public policy goals in regard to VoIP, participants had sharply differing views as to how to meet those goals. Thus, the forum provided a preview for the debate about VoIP – and more broadly, about the future of telecommunications regulation – that will occur in the future. This report, a summary of the forum discussions, is intended to inform that debate and present the public perspective regarding VoIP. Table of Contents What is VoIP? VoIP services vary and are constantly evolving, but the easiest way to think about them is to picture a telephone connected via an adapter to a broadband Internet network. The caller dials a number on the telephone as usual, but as the call is carried to the number at the other end, part of its journey is over the Internet. It isn’t necessary to have a computer to make or receive VoIP calls, though to use some of the enhanced features that may be offered by VoIP service providers, such as the ability to retrieve voice messages in email form, one obviously needs a computing device. It is necessary to have a broadband connection to make calls using VoIP service, but not to receive them. VoIP service is offered by a variety of providers, including but not limited to some traditional telephone companies, cable companies, and independent providers. But because, in most cases, calls made using VoIP originate from one phone number and terminate at another, the local exchange carriers that make the connections to those numbers still play an important role, no matter from whom the customer purchases the service. VoIP service providers compensate those carriers for their roles in the calls. Advantages of VoIP
One advantage of
VoIP service is its flexibility. For one thing, it is not tied to geographic
location. A customer living in the 202 area code of There is no distinction between long-distance and local VoIP calls – VoIP is marketed as “all distance,” allowing customers to make unlimited calls anywhere within the United States for one flat monthly fee (there are separate charges for international calls). This offers potential savings for consumers, especially those who normally make many toll calls. In addition to voice communication, Caller ID, voice mail, and other traditional telephone services, VoIP providers may offer other features, some of which are Web based. Videoconferencing, real-time language translation, “follow me” services that enable customers to get calls no matter where they are and what devices they are using at the time, integration of email and telephone address books, message retrieval options, calling logs, the ability to initiate a call by clicking on a number on the computer screen – these are just some of the capabilities that are or will soon be offered. Disadvantages of VoIPThere are some disadvantages to VoIP, however. One is that the service does not work when the power is out. Another is that the VoIP service may not be connected to local 911 emergency service or to E-911 (which shows the emergency dispatcher the caller’s physical location and callback information). The availability and affordability of broadband Internet access are also matters of concern. The cost of having a broadband Internet connection to make calls using VoIP is separate from that of the VoIP service, though some service providers may offer packages that provide both. That cost is beyond the reach of many lower income consumers. In addition, broadband service may not be physically available in remote and sparsely populated areas. Furthermore, some of the features included in VoIP services may not be accessible to people with certain types of disabilities. And while many consumers may switch to VoIP service over time, there will always be some people who are simply not interested in having VoIP. They may be disadvantaged if the cost of traditional phone service rises. In their welcoming remarks, NCL President Linda Golodner and APT President Debbie Goldman spoke about the vital role that telecommunications services play in people’s daily lives and the need for dialogue among all stakeholders as the policy framework for VoIP is developed. Both NCL and APT have articulated basic principles that, from the consumer perspective, must be incorporated in that policy framework. · VoIP providers must contribute to universal service funding to ensure affordable access to telecommunications services for all Americans; · VoIP services must be designed to be accessible by people with all types of disabilities, and VoIP service providers must contribute to funding for telecommunications relay services to ensure that people with speech and hearing disabilities have access to telecommunications services; · VoIP service providers must provide access to emergency 911 services; · VoIP service providers must meet consumer protection obligations. The Regulatory Landscape for VoIPBackgroundThe debate about whether and how VoIP should be regulated, and by whom, has already started. The day before the forum, the Federal Communications Commission (FCC) ruled that the VoIP service offered by Vonage and similar services are interstate, and therefore under federal jurisdiction, leaving the jurisdictional roles of states in question. Still to be determined is whether VoIP should be defined as an “information service” or a “telecommunications service.” The distinctions are more than just words – telecommunications services are subject to a host of regulatory requirements that do not apply to information services. Congress is likely to consider legislation concerning VoIP; in 2004 bills were filed seeking to prevent VoIP from being regulated in the same way as “plain old telephone service.” A Federal Perspective In a panel discussion about VoIP regulation, Jeffrey Carlisle, Chief of the Wireline Bureau at the FCC[3] said that government policies do not exist in a vacuum and need to be re-examined to ensure their relevance to evolving technologies and achieve market efficiencies. Functionality arguments (if it quacks like a duck, it must be a duck) don’t always make sense, he observed, in attempting to apply legacy regulations to new situations. He acknowledged that some social policies are not necessarily market-driven. Technology neutrality makes more sense in terms of social obligations, in his view, than it may in determining how to regulate other aspects of new services. The question is how to achieve important social goals, while at the same time promoting competition and taking advantage of opportunities to “do things better.” Mr. Carlisle explained that the FCC has acted so far on one jurisdictional issue, declaring that states are preempted from applying their 911-certification requirements to VoIP providers because VoIP is a mixture of interstate service and intrastate service. However, there are many other matters to be addressed such as universal service and compensation for the telephone carriers that connect the calls, and the FCC wants very much to get the public view on these issues.
A State Perspective Brian Adkins, Legislative Director for the National Association of Regulatory Utility Commissioners (NARUC), argued that if the functionality of a new service resembles that of an old service, the same oversight that protects consumers should apply because consumers’ expectations are the same. He pointed out that VoIP is being marketed as a substitute for one’s “old” telephone service, not as an additional service. Just as state and federal securities regulations apply no matter whether consumers buy stocks by phone, online, or in person, state and federal telecommunications regulations should govern telephone services no matter how they are provided. He pointed out that consumers depend on voice services much more than they do on email. Mr. Adkins said that states have particular expertise in regard to universal service, 911 emergency services, and consumer protection. The states want to work with the FCC to ensure fair competition and good consumer services. Rather than dealing with VoIP in a piecemeal fashion, he suggested that it should be addressed holistically. In his view, key issues such as carrier compensation for connecting calls, local number portability, user choice of service providers, and the role of the state and federal governments must be resolved as part of an overall framework for governing VoIP. A Canadian Perspective According
to Michael Janigan, Executive Director of the Public Interest Advocacy Centre (PIAC) in
The consumer view
in Law Enforcement SurveillanceDuring lunch at the forum, participants heard two points of view on whether the Communications Assistance for Law Enforcement Act (CALEA) should be applied to VoIP services and the Internet more generally. BackgroundCALEA was adopted by Congress in 1994 in response to law enforcement concerns about the difficulty of conducting wiretaps over increasingly complex telecommunications networks. Of particular concern at the time was the then-nascent cellular technology. CALEA requires telecommunications carriers to develop their systems in a manner that makes it possible for law enforcement to effectuate court-ordered surveillance. It attempts to balance the needs of law enforcement agencies with two other important interests: promoting technological innovation in the telecommunications field and protecting personal privacy. CALEA did not extend its coverage to “information services.” The statute provides law enforcement with the authority to seek and implement court orders for surveillance and requires telecommunications carriers to cooperate fully to implement those court orders, including providing law enforcement agencies with access to their systems, but carriers can seek exemptions in situations where compliance would be too burdensome or costly. To protect personal privacy, carriers must isolate the communications covered by court orders and deliver them to the authorized law enforcement agencies, obviating the need for agencies to access the entire stream of communications to find the court-ordered content. At issue now is whether CALEA’s provisions apply to VoIP. The Center for Democracy and Technology (CDT) and other civil liberties groups argue that VoIP is an “information service” and so is not covered by the statute. Law enforcement argues that most forms of VoIP are covered by CALEA. Acting on a petition from the U.S. Department of Justice (DOJ), the FCC has issued a Notice of Proposed Rulemaking tentatively concluding that broadband access and “managed” or “mediated” VoIP are covered by CALEA. No final ruling has been issued yet in that regard.
The Law Enforcement Perspective
Monique Roth, Counsel to the Assistant Attorney General in the Criminal Division at the DOJ, stressed the distinction between law enforcement agencies’ authority to conduct wiretaps and their ability to isolate and capture the communications authorized in court orders. Law enforcement’s authority is not at issue – it is the access, or ability to effectuate court orders in a timely manner and in a way that does implicate privacy concerns, that is at the heart of CALEA. Electronic surveillance is one of the most potent tools available to law enforcement, a tool reserved for situations where no other law enforcement method can reasonably be applied, or where other traditional law enforcement methods have been tried and failed. Courts monitor its use closely. According to Ms. Roth, it is often the only tool that can be used effectively to investigate organized criminal networks, such as terror cells and drug cartels. Ms. Roth observed that the premise underlying CALEA, the need to preserve law enforcement agencies’ ability to conduct court-ordered electronic surveillance, is perhaps even more vital today than it was in 1994 when the statute was enacted because of the increased threat of terrorism and increasingly complex communications technologies. The Civil Liberties PerspectiveJohn Morris, Staff Counsel at the CDT, agreed that law enforcement agencies must be able to intercept communications with the appropriate reasons and authority. But he argued that CALEA does not and should not apply to the Internet or to VoIP, and that there are more appropriate tools for law enforcement agencies to use. He contended that CALEA essentially gives the FBI the ability to exert precise control over the design of the telephone network to ensure that it fulfills surveillance needs. Even in the telephone system, which is fairly stable and centrally operated by a small number of companies, this has proven to be problematic, as the FBI has used its power to impose on the industry costly surveillance features that have gone well beyond the telephone network’s traditional capabilities.
Mr. Morris noted
that the Internet is very different than the telephone network. For one thing,
Internet services are provided by a diverse array of companies in a
de-centralized manner. Extending CALEA to the Internet would effectively enable
law enforcement agencies to exercise “approval” of Internet technology to
ensure that it is CALEA-compliant. This would drive technological innovation
out of the Furthermore, he said that considering the vast amount of personal information transmitted and stored on the Internet, requiring service providers to design their systems to collect and supply certain information in the event that it is needed by law enforcement would greatly increase the potential for breaches of privacy and security. Law enforcement agencies can already obtain the information they seek from Internet service providers, according to Mr. Morris. If the issue is making that information easier for law enforcement agencies to use, the solution is to invest in improving their own technological capabilities, rather than forcing the industry to design Internet products and services to meet government specifications. This would be in keeping with the non-regulatory approach that has been taken to the Internet and information services, focusing on the transport layer (the ability of law enforcement agencies to extract call-identifying information from packet streams) rather than on the application layer of Internet architecture. Mr. Morris concluded that Congress, not the FCC, should examine this issue and set policy for law enforcement surveillance in VoIP and other Internet-enabled services. Points of DebateMs. Roth disagreed with Mr. Morris’ characterization of the government as desiring to design or pre-approve communications systems, saying that CALEA specifically prohibits that. The statute recognizes that telecommunications carriers are best suited to design their systems in a manner that allows for law enforcement access. She said it is important, however, for there be a dialogue between industry and law enforcement so that both the technical access needs of enforcement agencies and the abilities and limitations of carriers to meet those needs are understood. Some of that dialogue occurs now in the context of standards setting bodies. Perhaps even more importantly, the FBI and the DOJ have an ongoing and healthy dialogue with individual carriers. Mr. Morris countered that CALEA has the effect of enabling law enforcement agencies to exert control over the design of communications technology. He also said that it was important for there to be a dialogue between law enforcement and civil liberties groups.
Ms. Roth disputed that
extending CALEA to VoIP would drive innovation out of the Ms. Roth said that in some cases involving VoIP communications, law enforcement agencies are finding that they are unable to effectuate court orders in a timely manner. While she could not publicly divulge the specific technologies that posed interception challenges for law enforcement agencies, she noted that it was law enforcement’s documented inability to timely intercept some types of communications that led to the enactment of CALEA in the first place. Now the challenges that new and vastly more complex technologies present to law enforcement agencies must be addressed. Mr. Morris reiterated that the issues should be thoroughly considered in Congress, as they were when CALEA was enacted. Stakeholder Roundtable on VoIP Issues The afternoon segment of the VoIP forum featured a lively, interactive discussion among participants representing various constituencies about a broad array of issues. Facilitator Paul Schroeder, Vice President, Programs and Planning at the American Foundation for the Blind, also encouraged the audience members to intervene with questions and comments.
Serving Older People Chris Baker, a Senior Policy Advisor at AARP, observed that while the potential benefits of VoIP are exciting to consider, his organization is very concerned about the possibility that traditional consumer protections and social services might not be extended to VoIP. Older people pay a higher percentage of their incomes for telephone service than younger people and expect to have safe, affordable, reliable service to connect them to friends, family, doctors, and others. Their expectations for VoIP would be the same, but the reality might be very different. He said that basic consumer protections, such as requirements for truth-in-billing, reasonable notice of termination, and dispute rights must apply to all telecommunications services, including VoIP.
Serving Customers with
Disabilities Karen Peltz Strauss, Legal Consultant for the Rehabilitation Engineering Research Center on Telecommunications Access, said that market forces are not sufficient to guarantee that the ability to communicate will be affordable and accessible to all. For example, when trimline phones came on the market years ago, they did not have the electronic signal strength sufficient to work with devices for the hard of hearing. Today, there are problems with the disability compatibility of some wireless phone services. Disability access should be built into communications devices and services from the onset, not thought of later. She also said that while Section 255 of the Telecommunications Act mandates that telecommunications services must be accessible and usable by people with disabilities, it is not clear that this requirement would apply if VoIP were defined as an “information service.” Legal mandates for disability access in VoIP services must be enacted and vigorously enforced. Meeting Public Safety Needs Another topic of discussion was whether VoIP providers should be required to connect to 911 emergency service networks and support funds that make those services possible. Steve Souder, Director of the Montgomery County, Maryland 911 Emergency Communication Center, said that people expect and deserve to use 911 exactly as they always have, no matter what type of voice service they are using. When some members of the wireless telephone industry claimed that it was impossible to provide automatic number identification for 911 calls made via cell phones, public safety officials refused to accept that and the industry found a way to do it. VoIP service providers must also find a way to meet public safety obligations. Not only must people using VoIP be able to reach emergency services, but accurate location information must be conveyed to the dispatchers. For example, if consumers are using their VoIP services remotely from locations other than their homes, their 911 calls must be routed to the emergency service personnel where they are, not to their home area dispatchers. Mr. Souder reminded forum participants that state fees on telephone bills help to fund local 911 services. If states have no jurisdiction over VoIP and are unable to assess 911 fees, that funding will go down, even though the demand and cost of providing emergency services to the public will not. Perspective of New Service Provider Chris Murray, Director of Government Affairs at Vonage, a company that provides only VoIP, not traditional phone service, said that VoIP technology is providing significant benefits to consumers by lowering the cost of calls, greatly expanding the features of phone service, and putting pressure on incumbents to keep their prices in check. VoIP will also improve services to people with disabilities. For example, Vonage will soon roll out videophone service, facilitating communications between deaf users. Noting the importance of social obligations such as emergency 911 services, Mr. Murray explained that Vonage innovated the first 911 services for Internet calling, even though it did not have a mandate to do so. He said that Vonage continues to press forward and has created the first E-911 service for VoIP. However, he said that rolling this service out to the entire customer base has been impeded by foot-dragging on E-911 trials and implementation on the part of the incumbent telephone carriers. Mr. Murray contended that VoIP is neither the problem nor the solution to the current subsidy system for universal service. Vonage contributes to universal service today and will do so in the future. Universal service funding experienced a billion dollar shortfall before VoIP captured any market share. Mr. Murray said that universal service funding should go directly to consumers who need the subsidies, not to the local telephone exchange carriers.
Serving Lower Income and Minority
Consumers Ken McEldowney, Executive Director of Consumer Action, a nonprofit consumer advocacy organization that focuses on lower income and minority populations, asked what will happen to “plain old telephone service” if a significant number of consumers move to VoIP. Low and moderate-income people who can’t afford broadband access could end up subsidizing universal service and emergency services through charges on their phone bills, while higher-income people who have VoIP are not charged to support those services. Mr. McEldowney pointed out that 85 percent of households with annual incomes of over $75,000 have broadband service, while just 20 percent of households making under $25,000 a year do. He also expressed concern about whether the rates for traditional phone services will go up as providers shift to offering alternative services that may not carry the same regulatory obligations and costs.
Gabriela Lemus, Director of Policy and Legislation for the League of United
Latin American Citizens, shared those concerns and noted that many places
with heavily Hispanic populations, such as
Perspectives from Traditional
Telephone Service Providers Carl Giesey, Director of Policy and Planning at MCI, acknowledged that issues such as 911 and disabilities access must be addressed as VoIP is deployed. But he said that government has a role when the market fails. Rather than trying to apply all existing telecommunications regulations to VoIP, only those that are absolutely necessary should apply. He also asserted that state governments should get out of regulating retail phone services entirely, leaving that responsibility to the federal government as the distinction between local and long-distance services fades. Mr. Giesy agreed that universal service funding should flow directly to consumers who need the subsidies, not to the local exchange carriers. He suggested that universal service funding should be used to bring broadband service, not just telephone service, into people’s homes. Link Hoewing, Assistant Vice President for Issues Management and Technology Policy at Verizon, agreed that universal service funding was important to provide subsidies to lower income consumers, but he questioned whether that was the best way to address the challenge of bringing service to high-cost areas. He also said that universal service fees should be assessed on a flat rate per phone line, rather than using the current formula based on interstate services, since telephone service is moving to all-distance service. Mr. Hoewing noted that VoIP offered the potential for exciting new services for customers with disabilities, such as video features that will enable people with hearing disabilities to use sign language to converse. He also said that the industry is working to resolve the problems of access to 911 emergency services.
Comments from Forum Participants
Funding Universal Service While forum participants generally agreed on the importance of subsidizing telephone service for low-income consumers, there were differing views about how to provide service in high-cost rural areas, how universal service fees should be assessed, and how the funds should be distributed. Consumer advocates in the audience argued that per-line charges for supporting universal service would fall disproportionately on people who used their telephones the least (many of whom are lower income), effectively forcing them to subsidize the contributions of higher-volume users. They generally felt that all voice service providers should be required to collect fees from their customers to support universal service, regardless of the types of companies. Another issue is whether subsidies should be extended to broadband access for low-income consumers. One forum participant suggested that all Internet service providers should contribute to universal service funding, no matter whether they provide voice services or not. Since there are both state and federal universal service funds, advocates of state regulation argued that if states are preempted from regulatory oversight of VoIP and unable to require assessments for state universal service on VoIP bills, the already overburdened federal universal service fund would be even more strained.
Caller “Spoofing” A forum participant from a major financial services company raised another concern about VoIP: customers can choose any name they want to appear on Caller ID, so they can easily “spoof” well-known companies such as hers, intentionally misleading the called parties about to whom they are speaking. She called on VoIP service providers to work together to implement policies and technologies to prevent this abuse.
Consumer Protection Consumer advocates questioned whether laws and regulations concerning unauthorized carrier switching, truth-in-billing, unfair service termination, disputed charges for calls to 900 numbers, and other consumer protections would apply to VoIP if it is defined as an “information service” rather than a “telephone service.” Not only could VoIP customers find that they do not have the same rights as other voice service customers, but they might be unable to turn to their state public utility commissions for help, as they can now.
Reliability and Service Quality Some consumer advocates argued that price is not the only consideration in phone service; reliability and quality of service are also very important. Service providers said that battery back-up systems are being developed to address the problem of VoIP service not working when the power goes out.
Concerns about Consumer Choice If consumers are dissatisfied with the quality of service, the rates, the provider’s billing practices, and other aspects of a VoIP service, some industry representatives suggested that they could simply switch to other carriers. However, consumer advocates argued that good quality, accessible, fairly priced voice communications are too essential to customers and our society as a whole to rely on competition alone to provide. Furthermore, because information about unpaid telephone bills is available to all telecommunications service providers, consumers who refuse to pay for services because of poor quality or other problems may find that they cannot easily switch to other providers or that they must put down large deposits in order to obtain service. Consumer advocates noted that “choice” must continue to include “plain old telephone service.” Not everyone will want to have VoIP, even if it is readily available and affordable. Real choice must also include the ability to obtain broadband service from one company and VoIP service from another. Consumer advocates expressed concern that customers might find services to be incompatible or be discouraged from exercising real choice because of unfair contract terms or difficulty comparing diverse “bundles” of services from one company to another. ConclusionThe ability to communicate is central to our social, political, and economic system. VoIP provides a new way to transmit voice communications and offers many other new communications options. Consumer advocates believe that people should be able to expect that these technological advances will offer them better choice, quality, price, reliability, customer service, and accessibility than they had before, not less. Rather than viewing the basic consumer protection and social principles embodied in current telecommunications laws and policies as impediments, NCL and APT believe that those principles should be used as the basis for developing a policy framework for the 21st century that will promote improved and expanded communications options for all Americans. Resources for More Information about VoIP
Center for Democracy and Technology Communications Workers of Federal Communications Commission http://hraunfoss/fcc.gov/edocs_public/attachment/FCC-04-27A1.pdf National Consumers League
Acknowledgements
We would like to thank APT staffers Sylvia Rosenthal and Elena Berger and NCL staffers Susan Grant and Alison Merow, for their work on the forum. NCL would also like to thank the following companies for educational grants to support the forum: MCI
[1] NCL was
founded in 1899 to protect and promote social and economic justice for
consumers and workers in the [2] APT was founded in 1989 to foster public policy that ensures access to advanced technologies and their life-enhancing benefits for all Americans, regardless of income, age, ethnicity, location, or functional limitation. [3] His remarks were provided as his own, not as the opinion of the FCC or any individual Commissioner. |