Voice over internet protocol (VoIP) development and public policy implications

Abstract

PurposeIn the context of a current regulatory proceeding in the USA, the purpose of the paper is to argue for utilization of a new analytical framework to govern the regulation of the rapidly growing voice over internet protocol (VoIP) technology. Specifically, the paper recommends replacement of the Federal Communications Commission's (FCC) existing vertical regulatory structure with a new conceptual paradigm, a layered or horizontal model that more closely mirrors the structure of internet communications.Design/methodology/approachThe paper briefly traces the evolution of the FCC's current regulatory structure and its previous treatment of internet telephony. Current petitions by individual telecommunications companies before the FCC and the agency's notice of proposed rulemaking on VoIP are analyzed and business and economic implications of VoIP are discussed.FindingsThe paper finds that utilization of a layered model enables policy makers to target regulation to specific sources of market power in the access layer and to attainment of social objectives such as wiretapping, while allowing free market competition to govern competitive layers of internet communications.Practical implicationsRegulatory policy in a world of VoIP technology must change. The FCC's old way of regulating in a world where individual communication services are linked to specific technologies must be replaced in the new internet world of converging services.Originality/valueThe paper builds on previous research outlining the layered model and applies this new conceptual framework to the current issues raised in the FCC rulemaking. The paper intends to provide guidance to telecommunications regulators.