A Regulatory Level Playing Field?

European_UnionThere is an interesting discussion worth noting occurring in Europe right now – regulators there are asking if regulations that apply to traditional telecom providers ought not to also apply to companies offering similar services on the web. This discussion is the culmination of many years of lobbying by telecom companies asking for a ‘level playing field’. The executive branch of the European Union is expected this week to propose that online services be subject to the same regulation as companies that offers similar telecom services.

What might that mean for web companies? It might mean that if Skype or Google Voice allows people to make ‘telephone calls’ that these providers might have to provide their customers access to dialing 911. It might require that any online service that gives their customers a telephone number might have to allow customers to keep that number for other purposes (number portability). It might even mean that web companies might be subject to some of the provisions of net neutrality.

It’s easy to think that voice-related regulation of telecom companies is largely a thing of the past. Telecoms in the US have asking in a number of states to be deregulated for voice purposes – a trend that has accelerated since the FCC declared that landline voice is no longer a dominant service.

And certainly the days are gone when the FCC and the state Commissions regulated the price of every telecom product and set a lot of the rules about how a telecom company had to interact with customers. The most draconian aspects of telecom regulation have been relaxed, and in many cases are gone completely.

Yet there are still a lot of rules that apply to telecom companies both here and in Europe. There are rules about 911 and safety issues. There are the CALEA rules that require telecoms to comply with law enforcement surveillance of customers. There are privacy rules, and truth-in-billing rules and numerous other rules that telecoms are still expected to comply with, even as they are free to sell or bundle their products in any way they want.

The European Union is asking some good questions – and if this is adopted these same questions are going to get asked here in the US as well. Why, if Skype sells themselves as an alternative for service should they not have to provide the ability for a customer to dial 911? Why shouldn’t any web-based voice provider not have to comply with the same requirements for privacy, law enforcement or number portability as a landline or cellular telco?

Of course, given a choice the telcos would probably rather that these remaining regulations not apply to them. There is certainly a big push from the big US telcos to get out from all voice regulations. But there are at least some aspects of telecom regulation that are not likely to go away. It’s been proven many times how 911 saves lives. And there is a general belief among regulators that privacy and billing rules protect citizens from telco abuses. And law enforcement is unlikely to bend on the requirement that a telco of any sort help them implement a wire-tap order from a judge.

It’s interesting to me that the regulations here and in Europe are so similar. But I guess that a lot of regulation is the result of trying to address the same issues. For example, if customers have a right to privacy, then there are only so many ways this can be applied to a telephone customer.

The bottom line is that if this is implemented in Europe, and if the web-based companies are able to comply with these regulations, then I think we can expect that same concept to find it’s ways here in a few years. At the end of the day regulators like to regulate and there are a whole lot of voice-like services today on the web that are not subject to some of the basic things that are regulated for every other provider.

2 thoughts on “A Regulatory Level Playing Field?

  1. Dear Doug:
    I think the overarching issue here is going to be location. Telecom regulations have always been based upon where the parties were located, but that is becoming more and more murky.

    Under the old regime, it was easy to regulate the service provided to a telephone customer in any given state because there was physical plant and investment in that state by companies with some sort of presence there, offering services to commercial and/or residential customers in that state. For one, the service required a tel# physically identified as being there.

    Nowadays, the client may have a tel# with the state “A” tel#, but be located in state “B” gettng service through a provider located in state “C”. So who regulates who? And one or more of the parties may not even be in a state, they may be international…

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    • I think it matters first if such regulations come from the state of from the FCC. The FCC could order that anybody offering a voice-like service must provide 911 capabilities, and that would eliminate the issues you talk about. But this could be done at the state as well. A state could say that any customer using a service in their state must have 911 capability. The problem with state approach is that there might be multiple requirements, but that is already true today for nationwide companies. I don’t see regulators caring if the arrangements are complex. The kinds of issues that might be regulated are all customer-related, and so anybody providing a service to a customer located in that state would have to comply.

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