Barton: Close VoIP Loopholes

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Terrorists should not be able to exploit regulatory loopholes to make Internet-based phone calls outside the wiretapping authority of the FBI, Rep. Joe Barton (R-Texas) said last Wednesday.

Voice-over-Internet protocol service “should not become the communications medium of choice for terrorists,” Barton said in a statement released last Wednesday to coincide with a House subcommittee hearing on VoIP regulation.

As chairman of the House Energy and Commerce Committee, Barton will play a key role in shaping legislation aimed at overhauling the Telecommunications Act of 1996. One element of the bill is expected to cover regulations that would apply to VoIP services.

Key House Republicans, including Barton, plan to write a new telecommunications law next year if they can maintain their majority.

WIRETAP CONCERNS

Owing to advances in technology and the spread of consumer and business access to high-speed data connections, the Internet and private IP-based networks offered by cable and phone companies can transmit voice communications on a phone-to-phone and computer-to-computer basis — a cost-efficient alternative to traditional circuit-switched technology.

The Justice Department and FBI are concerned that if VoIP is not classified as a telecommunications service, they would lack authority under a key federal wiretapping law to monitor VoIP calls made by foreign and domestic criminals.

Barton and other key House Republicans want a minimal regulatory regime for VoIP, but they also share law enforcement’s concerns, especially in the wake of Sept. 11, 2001 attacks on the Pentagon and the World Trade Center.

“We need to make sure that law enforcement officials, when authorized, have adequate tools to track criminals and terrorists who use VoIP services,” said Rep. Fred Upton (R-Mich.), chairman of the House Subcommittee on Telecommunications and the Internet, where last Wednesday’s hearing was held.

Some of cable’s biggest players view VoIP as the next revenue geyser to spring from their $85 billion in digital upgrades since 1996.

Reaping the benefits of an aggressive VoIP rollout, Cablevision Systems Corp. today has 100,000 VoIP customers and is adding 3,000 a week.

Testifying before Upton’s subcommittee, Cablevision COO Thomas Rutledge endorsed VoIP rules that would give providers the freedom they need to invest and experiment with a dynamic technology that consumers are just beginning to utilize.

“In this world, I encourage policymakers to embrace the potential for consumer choice by establishing a broad, deregulatory, national framework that encourages new services and technological advancement,” Rutledge said in a statement.

Like Barton and Upton, Rutledge said he accepted the view that law enforcement had legitimate concerns that Congress should address.

“We also recognize that there will continue to be a need to address significant public safety and security issues,” he added.

Last month, Cablevision stunned the market by announcing that new customers could sign up for a digital voice, video and data bundle that costs $89.95 a month for the first year, a $30 price reduction to the regular price.

Senate and House lawmakers have introduced VoIP bills that would place the technology within the jurisdiction of the Federal Communications Commission. None of the bills would classify VoIP as a telecommunications service.

At a Senate hearing last month, Deputy Assistant Attorney General Laura Parsky said a Senate bill sponsored by Sen. John Sununu (R-N.H.) would undermine Justice’s wiretapping authority under the Communications Assistance for Law Enforcement Act of 1994 (commonly known as CALEA). After the hearing, Sununu said he disagreed with her assessment.

Last Tuesday, Reps. Cliff Stearns (R-Fla.) and Rich Boucher (D-Va.) introduced legislation that would bar state regulation of VoIP and prevent the FCC from establishing rates and terms for VoIP service and from conditioning the market entry or exit of VoIP providers.

The bill (HR 4757) would classify VoIP as neither an information service nor a telecommunications service. Instead, it would create a new classification called “advanced Internet communications service.”

“These IP-based services will have their own regulatory principles as specified in our bill,” said Boucher, after noting that the bill applied not just to voice IP services but also IP video and IP data. “Our goal is to treat all advanced IP applications, including VoIP, with a light regulatory touch.”

The National Cable & Telecommunications Association — which favors targeted VoIP legislation, but not a drastic overhaul of the 1996 telecom law — declined to address the substance of the Stearns-Boucher bill.

“We are reviewing the bill with our member companies and have no further comment at this time,” NCTA spokesman Brian Dietz said.

Boucher and Stearns serve on Energy and Commerce, while Boucher also holds a seat on the Judiciary Committee. The lawmakers said they deliberately sidestepped CALEA issues in their VoIP bill because they wanted to avoid having it jointly referred to Judiciary. They said they would tackle CALEA issues in separate legislation.

“We are creating a new category of service, which is not covered in the original CALEA rules. CALEA is specific to telecommunications services,” Boucher said.

Justice Department opposition to classifying VoIP as something other than a telecommunications service tracks with Justice’s CALEA-based opposition to the FCC’s decision to classify cable-modem service as an information service in March 2002.

OLSON’S LEAVING

The U.S. Solicitor General in the Justice Department has until July 29 to file an appeal with the U.S. Supreme Court challenging the U.S. Circuit Court of Appeals for the 9th Circuit’s holding that cable-modem service is partly a telecommunications service.

The solicitor general’s support is viewed as critical to obtaining high court review of the case.

Solicitor General Theodore Olson resigned last Friday. A Justice Department spokeswoman said an acting replacement had not been named.

The NCTA is planning a Supreme Court appeal, with or without solicitor general backing.

The cable industry fears that as telecommunications services providers, cable companies would have to sell wholesale broadband access to competing Internet-service providers.

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