March 2nd, 2005

VoIP : To Regulate or not Regulate?


itu-voip-stats-small.jpgI was reading the latest issue of ITU News and on the front cover of the magazine is as titled above. It is a informative article, particularly with survey of the 132 ITU Member States on the regulatory regime for VoIP. But unfortunately, never really answer the question: To Regulate or not Regulate?

While many people advocate for no regulation citing Internet as a successful precedence, the landscape for voice in general are very diferent, at least in Asia. Unlike US where there are strong competitions at various exchanges where carriers fight to provide interconnection with you, this does not exist in most part of Asia where there is usually an incumbent player.

Secondly, VoIP is too dependent on many of underlying infrastructure which are very also often heavily regulated. LECs can do a lot of stuff to screw up VoIP – throttling, port blocking etc etc, and these requires some regulatory intervention of some sort.

PSTN is still an regulated industry even in US to some extend. Thus, while it might be easy to classify pure voip as “unregulated”, the voip might interconnect with PSTN makes it hard to draw the line. Then add law enforcement consideration, security, social obligations, the whole thing start to feel like mission impossible even in countries who believe in deregulation and not trying to protect their own incumbent1.

Most important of all, investors and businesses will be less willing to put their money in areas where there is no regulation certainity. Would you put 10M to start a VoIP business knowing you might be forced to close down some day?

That’s why I feel the fundamental question is not regulate or not regulate :- As much as I hate to say, I think the answer is yes, we need regulation. The more important question is the principles behind the regulation: is it one that will stifle the technology or is it one that will remove barriers and foster innovation? I am all for the later.

1 Even FCC only classified pure voip as unregulated (see Pulver petition) but have remained silent on those that touches PSTN.

This is related to my duck slide : Swim like a duck, quake like a duck, looks like a duck but it is not a duck: what is it? It is a duckling. Not a duck yet but lets not kill it too early. And that’s how we do it in Singapore.

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