Big Brother to drive up VOIP fees

With the deadline for voice over IP (VoIP) carriers to comply with the FCC Communications Assistance for Law Enforcement Act [CALEA] less than a year away, VoIP vendors are beginning to roll out their wire tap technology.

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But even as CALEA compliance gets underway, the bigger question remains: Will VoIP providers be subject to additional government telecommunications regulations?

This week, Sonus Networks announced a partnership with Verint Systems to provide VoIP carriers with the technology for lawful intercept, otherwise known as wiretapping.

Sonus IP Multimedia Subsystem VoIP middleware will incorporate Verint's Star-Gate Communications Interception Solution.

The deal will mean that providers can listen in and record all calls and collect data, such as which number keys were pressed during a call, as well as numbers calling and called.

In an FCC notice sent out last summer about CALEA compliance, the Commission  called VoIP services a replacement for conventional telecommunications services.

"CALEA contains a provision that authorizes the Commission to deem an entity a telecommunications carrier if the Commission finds that such service is a replacement for a substantial portion of the local telephone exchange," read the statement.

But in calling them replacements, will VoIP providers soon be subject to other FCC telecom regulations?

The answer is "yes," according to Ron Cowles, research vice president at Gartner.

VoIP providers will be subject to certain rules and regulations "for the good of the public," said Cowles.

Although the Supreme Court found that the FCC has authority to deregulate (that is not regulate) Internet and VoIP providers, under Title 1 of the Communications Act, the Court also said that they can impose regulations in order to meet certain social obligation requirements.

The major vehicle for meeting those requirements is the $7.5 billion Universal Service Fund (USF), which every telecommunications company pays into, passing on the cost to its subscribers.

The fund addresses three main areas of concern: to provide E911 services for location information in emergencies; to provide discounted broadband connections to schools, libraries, and healthcare facilities, especially in rural areas; and to provide assistance to help defray the cost of high capacity circuits in rural areas.

In 2002, the FCC changed the formula it uses to collect USF funds, calling those changes interim. One approach the FCC is now considering would use the number of phone numbers a company or individual has rather than the number of lines.

A Gartner report said that "a connections-based system would shift some of the contributions [directly] to the customer," as opposed to the present system in which the carrier passes on the USF fee to its subscribers.

Cowles said the contribution to the fund, which he called a tax, could be "significant."