5 minute read |

The Current Battle for VoIP Classification and the FCC

VoIP phone service background

We have seen quite a lot of debate about the classification of broadband Internet and VoIP services over the last few years. There have been various arguments regarding the status of VoIP, the scope of the FCC’s authority to regulate ISPs, the concept of Net Neutrality and many other aspects of the Internet.

The rules that we now have were implemented in 2015 after significant public discussion. The result is that ISPs are classified under the Title II term of ‘common carriers’ as per the Communications Act of 1934. Under the current net neutrality rules, consumers are able to access any content at any time without discrimination from the ISP. Users are able to access any website or service of their choice at the same speed they paid for.

What Is Net Neutrality?

Net neutrality is the basic idea that all Internet traffic – regardless of origin, destination, type or content – should be treated the same. It means that the ISPs cannot charge more for ‘fast lanes’, slow down speeds for certain websites or otherwise prevent consumers from accessing any lawful content of their choice. The current net neutrality rules ensure that you get the full speed you paid for no matter which email provider, ISP or vendor delivers that service.

What Is Title II?

The Title II designation of common carrier serves a specific purpose under law. It means that any service provider that is classified as a common carrier cannot unjustly discriminate against users. Now that ISPs are classified under Title II, they are legally prevented from restricting access to specific types of content or websites. They cannot throttle Internet speeds based on the type of connection or origin of traffic.

Now we come to the important question – how does net neutrality and Title II classification affect VoIP service providers in particular?

Any decision that impacts ISPs and broadband Internet will have consequences for VoIP service providers. VoIP vendors depend on the Internet to deliver phone services to their clients. So any attempt to regulate or deregulate Internet service will affect VoIP as well. Let’s take a look at how net neutrality changes the landscape of the Internet.

Net Neutrality and VoIP

The current net neutrality rules benefit the VoIP industry in many ways. One is that it prevents discrimination against startups and small businesses by larger corporations. To understand this, let us imagine what would happen if net neutrality rules were absent.

Without net neutrality rules, there is nothing to prevent ISPs from entering into contracts or agreements with large corporations. For instance, Amazon can pay extra to ensure that users can access their website at full speeds. On the other hand, a small business or startup would not have the financial ability to pay such tolls. So their users now find that they cannot access the website or it takes ages for the page to load. Sooner or later, consumers will flock to the Amazon site just for the faster speeds.

It means that smaller companies cannot compete on the basis of the quality of their products or services. Startups may not even get off the ground before they are killed by the high fees to enable users to reach them. This applies to any industry including VoIP. Smaller providers with innovative features will not be able to reach their customers when compared to larger, more established incumbents. How can you compete on the basis of service quality if customers can’t even use your service?

Another consequence is that ISPs will be able to charge different rates based on the type of traffic. Suppose a business organization uses VoIP video calls and conferencing quite often. Now the ISP can create a separate package for video streaming and charge extra as opposed to a normal plan. In fact there is nothing stopping the ISP from charging VoIP service providers an extra fee to reach their customers at normal speeds. This means that users whose vendors can pay the fee get crystal clear video while others get slow connections, poor audio and general bad service.

In other words, ISPs can charge both service providers and users different fees to access the same content at full speeds as before. VoIP technology uses the Internet as a backbone for providing phone services. Net neutrality and Title II means that the Internet is a level playground for all users and businesses. There are no fast and slow lanes or throttling of speeds that privilege one business over the other.

Now that the FCC has started the process of dismantling the net neutrality rules – or at least scale them back – the debate over Title II has reignited. It is not hard to see that any changes will drastically change the VoIP landscape. It remains to be seen whether VoIP providers will be classified as common carriers or as information services. It may very well change the future of VoIP as we know it.

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