5 minute read |

Why Are Governments  Threatened by VoIP?

VoIP phone service background

Until VoIP arrived on the scene, voice communication hadn’t changed in decades. The PSTN network was reliable and offered high-quality audio on voice calls. While some new features like voicemail and caller ID made frequent appearances, innovative changes were not on the horizon. All that changed with the development of VoIP technology.

VoIP Challenges and Obstacles

When the first VoIP call was made in the 90s, the audio quality did not hold a candle to PSTN calls. In fact, users had no guarantee that the call would even complete. It was possible that the call would be dropped halfway into the conversation. Without high-speed Internet, VoIP calling was not popular either. The biggest reason for the spread of VoIP was the fact that it allowed users to make phone calls for free.

Over the next couple of decades, developers and service providers improved the technology to the point where audio quality and reliability is on par with landlines. On the way, customers have seen a slew of features that either improved on existing processes (like visual voicemail or digital faxing) or introduced new functionality (like click to call, multi-device ring etc.)

However, that doesn’t mean the road has been easy for VoIP. The industry has faced privacy and security challenges, regulatory obstacles, and a rapid increase in criminal activities like fraud. Authorities continue to debate the appropriate legislation to regulate the technology and to make the transition from PSTN to VoIP as smooth as possible for everyone. In many countries, VoIP regulation doesn’t even exist yet even though service providers exist.

Government Opposition to VoIP

In some countries like China, VoIP vendors face an imposing challenge – their own government. While legislators debate over the current method for regulating VoIP in some countries, other nations outright ban VoIP via direct and indirect means. The attitude towards VoIP varies from concern to outright hostility.

What is it about VoIP that makes governments so nervous?

Difficult or Impossible to Regulate

There are several reasons for opposition to VoIP. From the perspective of a government or regulatory body, new technologies have always proved difficult. This is because the law lags behind technological advancement. Regulatory bodies are unsure about how to govern new industries which cannot be categorized under existing legislation.

Take the case of VoIP in the United States. For a long time, the major players like the FCC, VoIP service providers, telephone carriers could not agree on the appropriate regulatory framework. Should VoIP be treated as OTT services or just like analog landlines? Should VoIP service vendors pay the same fees, taxes, and surcharges as conventional carriers? These are just a few of the questions that had to be settled after long debate and investigation.

The unclear legislation makes it difficult for governments to tax industries as well. Trying to decide how businesses should be taxed for services when there is no consensus on the appropriate legislation is difficult. Therefore it is unsurprising that many governments take a cautious approach towards new technologies including VoIP.

VoIP Enables Free Communication

VoIP is popular because it is mostly free. But quite a few authoritarian governments are hostile towards VoIP because the technology removes barriers to communication. Consider the example of China. The country’s citizens do not have free access to media like people in other nations. Access to television, radio, literature, and other forms of media is controlled and regulated. Chinese citizens cannot even access popular apps and services like Facebook as they’re not permitted to operate in China by their government.

Technology like VoIP and VPN services allow citizens to bypass government control. They can communicate easily with people from other countries, leading to a better exchange of ideas. Authoritarian governments thrive by restricting the free flow of information. It makes sense that they will not hesitate to ban any technology that has the potential to threaten the status quo.

In the case of VoIP, matters become more difficult by the fact that many providers encrypt voice calls by default. This means that any law enforcement authority or even the government cannot intercept, eavesdrop on or redirect phone calls. In most countries, law enforcement agencies need due cause to intercept analog calls. Some laws even mandate that service providers have to provide a way for investigators to listen in on specific calls.

This level of interception is difficult to implement for VoIP since encryption technology does not have a back door, so to speak. Many governments have been trying for years to crack the most popular encryption algorithms. They’ve also tried to get software developers to install backdoors specifically for such a use, although it has been met with resistance. It is yet another reason for governments to view VoIP as a threat or risk. As VoIP looks set to replace the PSTN, government opposition is yet another challenge that the technology has to overcome.

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