Growth of Internet Telephony
First Monday


The Growth of Internet Telephony: Legal and Policy Issues

The growth of Internet Telephony as a potential challenge to regular telephony or the Plain-Old Telephone System (POTS) is an area of academic inquiry long overlooked. This paper critically examines the opposition to Internet telephony with particular emphasis on the 1996 America's Carriers Telecommunication Association (ACTA) petition to the U.S. Federal Communications Commission (FCC), in addition to the European Commission's attitudes towards the matter. The semantic difficulties attached to an understanding of defining what exactly "Internet Telephony" means are also addressed.

Contents

Introduction
The Opposition to Internet Telephony
Beyond ACTA and software - Internet Telephony as the Service
Phone-tically speaking: VON & the EU
Conclusion

Introduction

What is Internet Telephony?

As the name suggests, Internet Telephony involves the usage of the Internet to transmit 'real-time' audio from one personal computer (PC) to another (or in some instances to another telephone itself). That is the simple, naive definition.

Internet Telephony (or 'Voice on the Net' (VON)) technology digitizes speech and transmits it as compressed data which is split and sent in packets over the Internet, to later be re-assembled at the receiving end. It also differs from traditional telephony since communication and transmission is done across Internet Protocol (IP) networks [1]. As such it represents a departure from the majority of communications today, which is performed over conventional switched networks [2]. Traditional telephony over a circuit switched network usually devotes a fixed bandwidth (or a circuit, in other words) between the two ends of the phone call; with unused bandwidth (silence or intermittent speech) being unrecoverable or un-reroutable to other calls. On the other hand, Internet telephony which occurs over an IP-based network requires all elements of information, be it text, graphics, or audio, to be compressed and broken into discrete elements for transmission and reception over the network. Hence, bandwidth can be recovered and made available for other users during moments of silence [3].

The Opposition to Internet Telephony

On the surface, Internet Telephony would seem a rather innocuous technology - harming no one, while allowing the average 'Netizen' to make (usually) long-distance calls for no charge or for comparatively less than they would through traditional telephony. Some, such as the America's Carriers Telecommunication Association (ACTA), would submit otherwise.

On March 4, 1996 ACTA petitioned the U.S. Federal Communications Commission (FCC) to prevent companies from selling Internet Telephony software and to "institute rulemaking proceedings defining permissible communications over the Internet" [4].

What exactly is ACTA?

To understand the nature of their complaint, it is necessary to understand ACTA. ACTA's membership consists primarily of small to medium-sized resellers of long-distance services; larger companies like AT&T, MCI and Sprint are not concerned with ACTA or their petition since they are 'wholesalers of capacity'. Internet telephony is not a form of competition in their market [5]. ACTA's main corporate purpose is to represent these small resellers of long-distance services in legal and political spheres.

The 'ACTA Petition'

In order to successfully argue their case, ACTA's first task was to demonstrate that the FCC has in fact regulatory control over the Internet. Arguing that under 47 U.S.C. Section 151, the Commission was created "for the purpose of regulating interstate and foreign commerce in communication by wire and radio..."; with the Internet being a novel and unique form of wire communication.

ACTA, recognizing that Internet Telephony was still in its infancy, drew upon the 1968 U.S. Supreme Court Case, United States v. Southwestern Cable Co. The Court was asked rule whether it was within the FCC's ambit to regulate the nascent cable-TV industry and, if so, whether it also had the authority to preserve the status quo pending further investigation and proceedings. With the Supreme Court ruling affirmative on both counts, ACTA argued that the Commission should take the same action in 1996 with regard to the new technology of long distance calling via Internet as it did thirty years ago: grant special relief to maintain the status quo so that it might carefully consider what rules are required to best protect the public interest and to carry out its statutory duties [6].

ACTA further submitted that goals such as Universal Service and fair competition in the telecommunications market were being thwarted by Internet Telephony as such companies evade levies and tariffs imposed on other telecommunications carriers. "ACTA submits that it is not in the public interest to permit long distance service to be given away, depriving those who must maintain the telecommunications infrastructure of the revenue to do so, and nor is it in the public interest for these select telecommunications carriers to operate outside the regulatory requirements applicable to all other carriers" [7]. The issue of access charges is undoubtedly the core of the petition. In U.S. telephony, service is split between Local Exchange Carriers (LECs) and InterExchange Carriers (IXCs). The generally monopolistic LECs provide local telephone service, whereas the IXCs provide long-distance service between LECs, making up a highly competitive, albeit regulated, industry.

Most long-distance phone calls in the U.S. involve an LEC connection on both ends (with the long-distance carrier as the bridge). Each time an IXC terminates or originates a call through an LEC, the IXC pays the LEC an access charge of roughly 3 cents per minute on each end. This access charge is greatly inflated but it covers Universal Service obligations. However, in the early 1980's the FCC ruled that providers of 'enhanced services', like Internet Service Providers (ISPs), need not pay these access charges. ISPs are treated as "end users" who can purchase lines that have no per minute charge for receiving calls from their customers [8].

Debunking the petition

While the petition names VocalTec, Webphone and others as respondents, it is also equally clear that the FCC's jurisdiction does not extend to software. Netscape, Voxware and Insoft, in a joint opposition [9] to the petition have argued quite convincingly that in traditional telephony there are many companies who supply software for operating telecommunications networks - such as software for switching and signalling in the public switched telephone network - none of which have ever been deemed subject to FFC regulation. It would then seem arbitrary to treat Internet Telephony software producers as telecommunications carriers and other companies who manufacture software for long distance services as not. Netscape, Voxware and Insoft further suggest that Internet telephone software is, if anything, customer premises equipment [10] (CPE) since it enable a user's computer and peripheral devices to communicate over the Internet. Worse still for ACTA (and others), CPE providers are unregulated and detariffed; state regulation of them has been pre-empted by the Commission itself.

As stated in Computer II,

"Beginning with our Carterfone decision this Commission has embarked on a conscious policy of promoting competition in the terminal equipment market. As a result of this policy the terminal equipment market is subject to an increasing amount of competition as new and innovative types of CPE are constantly introduced into the marketplace by equipment vendors. We have repeatedly found that competition in the equipment market has stimulated innovation on the part of both independent suppliers and telephone companies, thereby affording the public a wider range of terminal choices at lower costs ... Moreover, this policy has afforded consumers more options to obtaining equipment that best suits their communication or information processing needs" [11].

ACTA submits that Internet Telephony services should be considered interstate telecommunications carriers under definitions provided in the Telecommunications Act of 1996 [12].

"The term 'telecommunications carrier' means any provider of telecommunications services [the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used]... A telecommunications carrier shall be treated as a common carrier under this Act only to the extent that it is engaged in providing telecommunications services."

The Computer Professionals for Social Responsibility (CPSR) and the Benton Foundation in their joint opposition [13] to the petition argued that Internet Telephony software is more analogous to the telephone itself - surely no one will seriously consider the telephone a common carrier per se?

Indeed, Netscape and the CPSR (et al.) identified a key issue regarding the petition. ACTA seems to consider Internet Telephony software as the means per se whereas Netscape and others see the software as merely the mechanism for the input and output of audio, something which is not itself a part of the larger network needed for the transmission. In any event, it is neither practically nor functionally possible to distinguish real-time audio packets across an IP network from other packets such as, stored audio (and other files) and e-mail.

Should the FCC intervene to regulate e-mail and real-time text-based chats which, it could argued at some level, are depriving long-distance resellers of revenue? What next? Would the U.S. Postal Service file a complaint against Eudora, Pegasus (et. al.) for selling e-mail software? The slope is getting slippery, not to mention absurd.

The U.S. Telecommunications Act of 1996 makes it clear that it is the policy of the United States Government "to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation ..." [14]. In May 1997, while not explicitly ruling on the ACTA petition, the FCC ruled against requiring ISPs to pay per-minute access charges - instead an increase in fixed charges on each phone line for business users was implemented, ISPs included.

Digital Deja-Vu?

About seventy years ago, telephone, telegraph and radio broadcasters were competing for each other's markets; "[i]t seemed, in 1926, that very powerful companies, like Western Union and AT&T were going to grab all of the communications business... . So the federal government sat down ... divided up the turf" [15].Telephone companies were given responsibility for communications through telephone lines (voice telephony); Western Union, domestic telegraph through cable; and a number of other companies shared radio telegraph, becoming international carriers.

The present situation is not unlike that of 1926. "Now, the same telephone line that carries e-mail messages from a computer here to one in Botswana can also transmit graphics, photographs, video clips and voice communication. Thousands of computer users have been snapping up the software - or downloaded it for free - that lets them make the low-cost long-distance calls or conduct international video conferences" [16].

Beyond ACTA and software - Internet Telephony as the Service

Clearly then, the ACTA petition was fundamentally flawed since it did not identify Internet Telephony as the actual service (i.e. companies which provide IP Telephony services). It merely identified producers of software for the output and input of audio, some of whom may have coincidentally been offering IP Telephony services. Such identification on the part of ACTA was incidental. Indeed, the initial definition of Internet Telephony at the start of this paper (as merely the use of the Internet to transmit 'real-time' audio either from PC to PC or from PC to phone) neglects a third, next generation (if you like) type of Internet Telephony - phone to phone.

The first two types of Internet Telephony are inherently tied to the PC (including necessary software) and Internet Service Providers. The third type, however, is not. In phone-to-phone Internet Telephony the customer, using an ordinary telephone, dials an access code and then the telephone number; the access code then routes the call to a special computer gateway (the IP network) [17]. The trouble is that local computer gateways for companies offering this type of service must be placed in strategic geographic areas. For instance, if a customer using phone-to-phone Internet Telephony plans to call London (England) from Toronto (Canada), then local gateways must be located in both London and Toronto. The gateways convert audio into data for transmission across the IP network and then convert incoming data back into analog signals [18].

The FCC's definition of phone-to-phone IP Telephony requires that such services:

  1. Hold themselves out as providing voice telephony or facsimile transmission service;

  2. Do not require the customer to use CPE different from that CPE necessary to place an ordinary touch-tone call (or facsimile transmission) over the public switched telephone network;

  3. Allow the customer to call telephone numbers assigned in accordance with the North American Numbering Plan (and associated international agreements); and

  4. Transmit customer information without net change in form or content [19].

BellSouth, a regional telephone service provider for all of the Southeastern United States, announced that as of September 1 it would begin applying access charges on phone to phone long-distance calls placed using IP technology [20]. According to the FCC's report to Congress on April 10, 1998, "certain IP telephony services lack the characteristics that would render them 'information services' and instead bear the characteristics of telecommunications services ... ." BellSouth argued that phone-to-phone IP telephony is an example of such a telecommunications service.

In the FCC's report to Congress it states that "when an IP telephone provider deploys a gateway within the network to enable phone-to-phone service, it creates a virtual transmission path between points on the public switched telephone network ... . From a functional standpoint, users of these services obtain only voice transmission, rather than information services such as access to stored files. Routing and protocol conversion within the network does not change this conclusion, because from the user's standpoint there is no net change in form or content" [21]. Given this, together with the Telecommunications Act's (1996) definitions of a telecommunications carrier, telecommunications service (as cited earlier) and 'telecommunications' - as the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received - it seems readily apparent that phone-to-phone IP Telephony companies should be required to pay access charges for connecting to and\or the usage of the local phone companies' systems. In the absence of a more detailed case-by-case investigation, however, the FCC withheld any definitive conclusion regarding whether phone-to-phone IP Telephony should be properly considered a 'telecommunications' rather than an 'information' service.

With regards to specifically PC-to-PC Telephony, the FCC held that "Internet service providers over whose networks the information passes may not even be aware that particular customers are using IP telephony software, because IP packets carrying voice communications are indistinguishable from other types of packets... [in which case the] Internet service provider does not appear to be 'provid[ing]' telecommunications to its subscribers." While it would only be fair to presuppose this will also apply to PC-to-phone IP Telephony, big business cannot make that assumption. Sarah Hofsetter, speaking on behalf of IDT Corporation (the producers of Net2Phone, the first commercial telephone service to bridge live calls between PCs and regular telephones via the Internet while charging by the minute), expressed such a concern in a statement to the Tech Law Journal [22].

On September 11, U.S. West became the second regional Bell operating company (RBOC) to announce that it would collect access charges on IP Telephony. "The fact that such toll calls are transmitted by the toll carrier via packet switched, rather than circuit switched, technology does not relieve toll carriers of the requirement to order the correct facilities and to pay the appropriate access rates for service" [23]. Whereas BellSouth's justification for the collection of access charges on IP Telephony drew primary clout from the FCC's April 10 report to Congress, U.S. West cited FCC Rule 69.5(b) as its authority, which states:

"Sec. 69.5 Persons to be assessed...

(b) Carrier's carrier charges shall be computed and assessed upon all interexchange carriers that use local exchange switching facilities for the provision of interstate or foreign telecommunications services" [24].

However, as an analysis by David Carney of the Tech Law Journal correctly submits, that the FCC rule was simply about IXCs paying access charges, before the days when IP Telephony was even an issue [25]. Square pegs for pegless boards it seems.

Phone-tically speaking: VON & the EU

The European Commission, in supplementing their 1995 Communication on the status and implementation of the Commission liberalisation Directives, issued a notice [26] on January 15, 1998 defining its policy on voice telephony in respect of telephony via the Internet. Under article 1 of Directive 90/388/EEC defines

"'voice telephony' means the commercial provision for the public of the direct transport and switching of speech in real-time between public switched network termination points, enabling any user to use equipment connected to such a network termination point in order to communicate with another termination point."

Does Internet Telephony fall under this definition of voice telephony?

Consider the word "commercial." The Commission argues that Internet Telephony - understood as either PC-to-PC or PC-to-Phone - is not the principal aim of Internet access providers. Indeed the purpose of Internet access is for the facilitation of browsing, the exchange of electronic mail, and the exchange of data files. They do, however, properly identify phone-to-phone IP Telephony as involving a commercial offer. Similar considerations come into play when examining whether Internet Telephony is correctly "for the public", since computers and access to the Internet are not currently available to all citizens (nor are there any policies in place, as Universal Service, to help achieve it). The Commission argues that PC-to-PC Internet Telephony is not available 'for the public', while PC-to-phone and phone-to-phone IP Telephony are.

Even the phrase "direct transport and switching of speech in real time" proves problematic for the Commission. The Commission argues that "[t]he time period required [in Internet Telephony] for processing and transmission from one termination point to the other is generally still such that it cannot be considered as of the same quality as a standard real-time service" [27]. How the Commission is able to equate quality of service with time period is beyond comprehension. They further their logical leaps in the subsequent paragraph, arguing that since "... part of the transmission is over the Internet (which currently has only one class of services), it is subject to unpredictable congestion risk, making it difficult or impossible to guarantee the same level of reliability and speech quality as produced by the PSTNs." Granted that this statement may be true at this point in time, issues of reliability and speech quality are peripheral in addressing whether the phrase 'direct transport and switching of speech in real time' applies to Internet Telephony. In any event, cellular communications usually provide much poorer speech quality than regular telephony, yet cellular is still considered 'voice telephony'.

On an IP network packets are switched; in regular telephony the circuits are. Internet Telephony thus fulfils voice telephony's stipulation that 'switching' be involved. Internet Telephony (of all flavours) is real-time; it simply depends on how rigorously you define 'real-time'. Surely a delay of no more than two seconds would disbar the entire technology from being labelled 'real-time'? Even shouting to someone across the street produces greater delays! (The analogy of cellular communications is also applicable in this instance).

In perhaps a bid to lengthen an already flawed discussion of the applicability of the phrase 'direct transport and switching of speech in real time' to Internet Telephony, the Commission states

"[i]n cases where organisations offering phone-to-phone Internet voice are guaranteeing quality of speech by bandwidth reservation and claim themselves that the quality of the service is the same as circuit-switched PSTN voice, this element of the voice telephony definition will obviously already be met."

And circles are round.

The Commission concluded that Internet Telephony cannot be properly considered 'voice telephony' and therefore already fall within the liberalised area, before the deadlines set for the implementation of full competition. "[W]ith growing sophistication, certain Internet telephony providers will qualify as providers of voice telephony, and therefore be subject to the regulatory regime applicable to voice telephony in the future..." [28] [italics added]. The Commission has announced that it will review this policy in light of the evolution of IP Telephony early in 2000. The Commission is misguided in not considering phone-to-phone IP telephony as practically identical to regular telephony. It will be interesting to see if long-distance providers switch to IP networks to avoid Universal Service contributions.

Conclusion

The Demand for Internet Telephony

In understanding how policy (including legal policy) should deal with Internet Telephony it is perhaps worth examining the present and future demands for this type of service and technology. A mix of data from various sources should help in determining a mode value for its demand.

InfoWorld reported that Internet telephony is expected to have a compound annual growth rate of 137.9% through 2001 [29]. Probe Research, a telecommunications and data networking market research system, predicts that the Internet Telephony market will be worth $6.3 billion by the year 2002; at which point, Internet telephony (and fax) will account for nearly 10% of total long distance traffic [30]. International Data Corp. (IDC) predicts that the worldwide market for voice over IP networks will grow to $24 billion in 2002 (still only representing 11% of the total switched-circuit traffic) [31].

The market research firm of Frost & Sullivan forecasts users and carriers spending nearly $2 billion on IP telephony equipment by the year 2001, a significant increase from the 1996 figure of $19.8 million [32]. Another research firm, Forrester Research Inc., predicts that by the year 2004, phone companies will lose more than $3 billion, or 4 percent of their revenue base, to IP telephony. As a result, consumers will enjoy annual savings of $1 billion over what they would have spent sending their traffic over traditional networks [33].

Summary and Final Analysis

This paper has presented a brief overview of IP Telephony and the potential policy, legal and regulatory issues that arise from it. The regulatory picture becomes even murkier when Internet Telephony and cryptography meet. On September 14,1998 Clarent Corporation, a provider of phone-to-phone IP telephony, and Fortress Technologies, a developer of solutions for secure Internet communications, announced they are working together to combine high-quality Internet telephony over fully encrypted Virtual Private Networks [34].

While Internet Telephony does have the potential to significantly affect long-distance revenues, especially considering the low cost entry point for IP Telephony competitors, PC-to-PC and PC-to-Phone Telephony technology is still very much in its infancy. If history is any guide, the computer (and now the Internet) industries are best left unregulated [35]. Further, given the multi-tasking, multi-function, convergent nature of the Internet it would be foolish and absurd to consider regulating an isolated application. As the Computer Professionals for Social Responsibility argue, such thinking could kill the goose that lays the golden eggs [36], especially considering the promise that Internet Telephony holds for e-commerce. Visitors to a Web site who have questions or who are hesitant to make a purchase over the Web can click on a "call agent" button, which transmits a voice call over the user's PC or sends a message for the agent to call back on a separate line [37].

However, an argument could be made that, functionally, Phone-to-Phone IP Telephony resembles traditional long-distance telephony too closely for it to be exempt from access charges and universal service contributions without being arbitrary. While seemingly a valid point, the only FCC Commissioner who is not a lawyer - Harold Furchtgott-Roth (an economist) - submits otherwise.

Furchtgott-Roth argues that the imposition of fees and tariffs to IP Telephony would "[a]lmost immediately ... eliminate [it] as a competitor to foreign telecommunications monopolies that hold international settlement rates so high in so many countries. Like international call-back, IP telephony could have drive down costs much faster than inter-government negotiations and would have been perhaps the best lever to bring rates down to benchmark levels. The United States sends billions of dollars abroad as a result of unfavorable international settlement rates. IP telephony could save American rate-payers billions of dollars, possibly a significant portion of the size of a federal universal service fund" [38]. There is also the issue of 'technological discrimination'. It would seem that by supporting access charges and universal service contributions for phone-to-phone IP Telephony services an implicit technological caste system is condoned, whereby the 'rich' who can afford computers and Internet access, are able to make free to low-cost long-distance calls. Currently, those without access to computers still have the option of phone-to-phone IP Telephony services over regular (inflated) long-distance charges - but by imposing access charges (and such) on providers of such services, those cheaper rates may no longer be so.

As the following analysis suggests IP Telephony may influence traditional long-distance telephony positively, at least from the consumer's standpoint.

Trends in Long Distance Rates and Exchange Access Charges

Figure 1: Trends in Long Distance Rates and Exchange Access Charges [39]

Figure one illustrates that despite long-distance companies complaints that revenues lost through access charges are passed on to consumers in the end through higher long-distance rates, quite the opposite is occurring. Even when local telephone companies reduced access charges by $9 billion, long-distance companies merely kept the earnings without passing any savings to consumers. And to add insult to injury, long-distance rates continue to increase (six times in five years).

In March of this year AT&T and a handful of RBOCs formed a coalition to require Internet Phone services to pay some regulatory costs [40]. AT&T, perhaps suffering from corporate schizophrenia, soon began offering their own IP-based services - fax and phone-to-phone, recognizing in part the enormous potential IP-based services have to offer [41].

On April 2, ACTA re-voiced their cries, asking the FCC to begin regulating Internet Telephony- stating that it may shelter $24 billion dollars a year from Universal Service "taxes" by the year 2002 [42]. Notice how equivocal ACTA's terms are; what does "Internet Telephony" mean? Merely software providers they identified in their original complaint? Or providers of Phone-to-Phone IP services as well? Are they expecting Internet Telephony software providers to capture 13% of the long-distance market? Or do they mean that providers of Phone-to-Phone IP services will take 13% of the market? It seems as though ACTA has realized its error and - rather than file a new complaint - decided to take a new approach using press statements as their weapons.

At present perhaps the best approach to dealing with IP Telephony services would be to "wait-and-see". Undoubtedly, IP Telephony will affect Universal Service revenues. However, it would be unfair to tax a service at this point in timethat still needs to grow.

About the Author

Emir A. Mohammed graduated from the University of Western Ontario (London, Ontario) with his BA in Philosophy in 1997. He then pursued his Masters in Laws (LLM) in Information Technology and Telecommunications Law from the University of Strathclyde (Glasgow, Scotland). He currently teaches Intellectual Property and Internet Privacy Law online with the UCLA Education Extension.
E-mail: emirmohammed@sprint.ca

Notes

1. An Internet protocol defines how information gets passed between systems across the Internet, see http://www.cnet.com/Resources/Info/Glossary/Terms/ip.html

2. VON Coalition Frequently Asked Questions.

3. Brett A. Leida, 1998. A Cost Model of Internet Service Providers: Implications for Internet Telephony and Yield Management. Massachusetts Institute of Technology M.S. Electrical Engineering and Computer Science/M.S. Technology and Policy Thesis (February).

4. ACTA Internet Phone Petition (RM No. 8775), March 4, 1995.

5. Background on ACTA Members.

6. Taken from Commission's Authority to Grant Special Relief to Maintain the Status Quo; Id.Fn (4).

7. Summary of Filing; Id. Fn (4).

8. Regulation [IP Telephony].

9. http://www.technologylaw.com/techlaw/acta_comm.html

10. The U.S. Telecommunications Act of 1996 defines it as "equipment employed on the premises of a person (other than a carrier) to originate, route, or terminate telecommunications."

11. Computer II Final Decision, 77 F.C.C. 2d 384, 387 (1980).

12. Id.

13. http://www.cais.net/cannon/acta/body.htm

14. http://www.fcc.gov/Reports/tcom1996.txt

15. Diedtra Henderson, 1996. Long-distance carriers wail over dirt-cheap Internet calls, Seattle Times (March 24), quoting University of Washington Professor John Bowes.

16. Id.

17. Hence the reason why it is still technically a form of Internet Telephony since the transmission is done via (Internet Protocol) networks.

18. See Andrew Sears, The Effect of I-Phone on the Long Distance Voice Market, revised October 4, 1996, at 2-3; available from The I-Phone Consortium, MIT.

19. Para. 88, FCC Report to Congress re: Universal Service and Taxation of Internet Telephony.

20. BellSouth Policy on IP Telephony.

21. Para. 89, FCC Report to Congress re: Universal Service and Taxation of Internet Telephony

22. Reaction to FCC Report to Congress, April 15, 1998.

23. U.S. West Letter to IP Telephony Providers, September 11, 1998.

24. http://techlawjournal.com/agencies/netphone/47cfr69.htm

25. U.S. West to Assess Access Charges for Internet Telephony.

26. http://europa.eu.int/comm/dg04/lawliber/en/voice.htm

27. Id.

28. http://europa.eu.int/comm/dg04/lawliber/en/voicepre.htm

29. http://www.infoworld.com/cgi-bin/displayArchive.pl?/98/01/e01-01.71.htm

30. Taken from a transcript of the October 6, 1998 Congressional Record (Senate) at Deja-News, 1998CRS11572 Internet Tax Freedom Act.

31. "Public network still cheaper, better," ComputerWorld, March 30, 1998.

32. Internet Telephony Brings Added Capabilities, Savings to Consumers

33. Id.

34. Clarent Corporation, Fortress Technologies Partner to Offer Industry's First Network-Level Encryption for Internet Telephony (press release).

35. The long-standing legal battle between Microsoft and the U.S. Department of Justice is perhaps the prominent example of when and where the Government's place should be in ensuring fair competition in an unregulated industry.

36. CPSR Comment on Internet Telephone Petition

37. "Vendors Unite Behind Voice-Over-IP; Customers Are Still Wary," TechWeb News, April 2, 1998.

38. Dissent of Harold Furchtgott-Roth.

39. WEFA Group, Derivation of Modeling Assumptions for the Immediate Regulatory Relief Simulation, Figure 3.

40. "Net Phone Backers Fight New Fees," TechWeb News, March 16, 1998.

41. AT&T's Connect'N Save

42. Citing a study estimating that Internet Phone Services could capture 13% of the long distance market by 2002. See ACTA Asks Kennard for Immediate Action on Internet Telephony Petition; Current Environment Will Cause "Severe Universal Service Shortfall", February 2, 1998.

Bibliography

America's Carriers Telecommunication Association (ACTA), "ACTA Asks Kennard for Immediate Action on Internet Telephony Petition; Current Environment Will Cause "Severe Universal Service Shortfall""

European Commission, "Status of Voice Communications on Internet under Community Law and, in particular, under Directive 90/388/EEC"; see also Press Release.

U.S. Federal Communications Commission (FCC), ACTA Internet Phone Petition (RM No. 8775); see also Telecommunications Act

Internet Telephony Watch, Background on ACTA Members

Brett A. Leida, 1998. "A Cost Model of Internet Service Providers: Implications for Internet Telephony and Yield Management," MIT M.S. EECS/TPP Thesis (February).

Andrew Sears, 1996. "The Effect of I-Phone on the Long Distance Voice Market," revised October 4, 1996.

VON Coalition, "VON Coalition Frequently Asked Questions."


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