Firm Seeks FCC Ruling on Free VoIP


Washington— A company that has just introduced an Internet-based phone service that's free to users has sought federal recognition that the product is an unregulated information service.

The service — called Free World Dialup provided by — allows consumers with a cable-modem or digital-subscriber-line connection to make local, long-distance and international phone calls at no cost.

Because FWD claims that it is neither owns facilities nor charges a fee, has asked the Federal Communications Commission to rule that FWD is neither a telecommunications nor a telecommunications service, as those terms are defined in federal law.

Unlike information services, telecommunications services are heavily regulated.

"Ultimately, FWD is not a regulated service provided by a carrier, but an Internet application riding over the transport capabilities purchased by the consumers," said in a Feb. 5 filing with the FCC, which has asked to receive initial public comments by March 14.

IP questions

Nearly all segments of the phone industry are pressing the FCC for answers regarding voice-over-Internet protocol's regulatory status.

AT&T Corp. wants the service exempt from access charges, the funds that flow to local phone companies to keep local dial-tone service affordable throughout the United States.

The local phone firms, joined by some state regulators, are concerned that AT&T's plan would put a dent in universal service funding and perhaps drive up local phone bills.

FWD is another flavor of IP telephony that seeks a market niche from the multibillion-dollar broadband investments cable and telephone companies have made in recent years.

Since its inception last November, FWD has signed up 8,000 customers, with 40 percent in North America, Pulver said last week.

FWD is the creation of Jeff Pulver, whose Melville, N.Y., firm conducts conferences to promote broadband applications such as IP telephony.

Pulver is a co-founder of Vonage Holdings Corp., another provider of IP telephony over broadband networks, and retains a financial interest in that company.

Simple set-up

Based on Web site descriptions, consumer access to FWD is not complicated, though some might balk at the necessary one-time equipment cost.

An FWD customer must buy a special phone compatible with Session Initiation Protocol (SIP). Cisco Systems Inc. makes SIP phones, such as the ATA-186 adapter, that are widely available on Internet auction site for $125; more advanced models with actual handsets cost twice as much.

The other step is to visit Pulver's Web site ( and register to receive a unique five-digit FWD phone number.

FWD includes several features, including caller ID and call waiting, but there is one drawback that any potential user should know: For now, an FWD caller is able to connect with only another FWD customer, and both need to be online to complete the connection.

But Pulver is nothing but optimistic that a huge IP user group is about to connect.

"People around the world with broadband access are five digits away from dialing their best friend or whomever," Pulver said.

Mining data gold's role in all of this is to serve as the repository of all FWD phone numbers, which someday could turn into the database gold mine that the Yellow Pages did for traditional local phone companies.

"What I am hoping for is that we can get a sizable enough number of people registered so that when I figure out what value-added service people will eventually pay for, I have a captive community to sell to," Pulver said.

Pulver turned to the FCC at a time when his service is largely unknown to get a jump on competitors that may want to see FWD bear the same regulatory burdens as traditional phone carriers.

In 1996, a group of long-distance companies concerned about the financial impact of IP telephony — then a nascent service employed in a PC-to-PC manner — urged the FCC to bar IP telephony software companies from continuing to distribute their product. The FCC never acted on the petition.

"I figured the time was right to be proactive for a change," Pulver said.

Pulver said FWD can grow big, pointing to Yahoo! Japan and its 1 million IP telephony customers, who utilize digital subscriber line connections.

"There's no reason why we can't get to a million also," Pulver said.

Cable operators with their own IP telephony ambitions are monitoring Vonage and FWD as they attempt to win cable modem customers to their products. Pulver contends cable-modem service is more attractive when coupled with easy-to-use voice applications.

"Comcast would be morons to cut us off, because in time we become another reason why someone would want Comcast" for cable-modem service, he said.

Comcast, the largest U.S. cable company with 22 million subscribers, is still planning an IP telephony launch in the second quarter, spokesman Tim Fitzpatrick said last week.