FCC will address Internet call issue ; New phone method largely unregulated

WASHINGTON – Regulators agreed Thursday to set rules for Internet telephone calls, and for a new way to reach the Web through an electrical outlet.

The Federal Communications Commission said it would decide how to regulate calls made via high-speed Internet connections, which bypass at least part of the conventional phone network.

While the Internet has been largely free from regulation, the FCC is getting involved now because some telecommunications services are migrating to the Web and companies want to know how the government will regulate what is known as Voice Over Internet Protocol, or VoIP. Among those who have asked the FCC to rule is AT&T.

“You have different entities petitioning the FCC for an answer,” said Grant Seiffert, vice president of the Telecommunications Industry Association, a trade group. “They say, ‘We want to provide this service. Are you going to regulate us?’ They’re being asked to make a judgment.”

Traditionally, a phone conversation is converted into electronic signals that traverse a network of switches, in a dedicated circuit that lasts the duration of a call. In VoIP, a conversation is converted to packets of data transmitted over the Internet. The packets get reassembled and converted to sound on the other end of the call.

The FCC on Thursday told one company offering VoIP, pulver.com’s Free World Dialup, that it was not a telephone service and therefore not subject to regulation. Consumers can join Free World Dialup for free and then make calls to other members without using a regular telephones. Special numbers rather than 10-digit phone numbers route the calls.

As it looks at regulating Internet calls, the FCC plans to look at whether such calls should be subject to the same fees as regular telephone service, such as those that fund 911 emergency services or bringing telephone service to poor and rural areas, schools, and libraries. Also to be decided is whether these new services need to pay fees to local telephone companies to complete calls to conventional phones.

“This is the curtain going up on a really new era in communications,” FCC Chairman Michael Powell said. “The opportunities before us are much greater than the pitfalls before us.”

Powell and the other two Republicans on the five-member commission have said they feel this new technology should be lightly regulated, unlike the myriad of federal and state rules governing conventional phone service.

They have expressed concern that government regulation could strangle the emerging technology, while many telephone regulations are designed to promote competition in markets dominated by the former Bell companies, a situation that doesn’t exist online.

Separately, Bill Maher, chief of the FCC’s Wireline Competition Bureau, said the commission would begin developing rules this spring for Internet phone calls that address the concerns of law enforcement, such as ensuring that those calls can be tapped and traced by investigators, just like conventional calls can under a court order.

The commission also voted to develop rules allowing the power lines that bring electricity to homes and businesses to also deliver high-speed Internet connections.