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April 1, 2004
CONTACT: David Fish
(202) 289-8928

Internet Voice: New Rules for New Tech
FCC Should Go Step-By-Step; Congress Must Update Law, May Says

WASHINGTON, D.C. - As smart as they may be, telecommunications regulators will never be able to keep pace with technology, according to one seasoned regulatory veteran, who points to the emergence of Internet voice new technologies - Voice over Internet Protocol (VoIP) - as an example in the making. He believes that, not being able to anticipate technological change or market conditions, and being hamstrung by old processes and competing industry requests, the Federal Communications Commission should approach the regulation of VoIP using a "step-by-step" approach.

"Yet again, technology is challenging regulation," writes Progress & Freedom Foundation Senior Fellow and Director of Communications Policy Studies Randolph J. May in his regular Legal Times column. "In the telecommunications industry, whenever a disruptive innovation comes along, the Federal Communications Commission is hard-pressed to keep its regulations up to date." He urges the agency to avoid "cumbersome rulemakings" as much as possible. He also believes Congress "should enact a new telecom framework."

"Agencies such as the FCC charged with making policy in fast-changing, uncertain environments would do well to resort more often to case-by-case adjudication," he writes. "More frequent resort to incremental proceedings that result in specific rulings based on a particular set of facts is likely to result in the development of sounder policies, with less prolonged periods of regulatory uncertainty." May notes that the FCC has used both approaches in recent months: On February 19, the agency "issued a declaratory order - a form of APA [Administrative Procedure Act] adjudication - holding that one type of VoIP is not regulated telecommunications." But on March 10, it released "a very broad rule-making notice" on VoIP, inviting comment on at least 100 open-ended questions.

May believes this latter approach is fraught with difficulty: "Rule makings that solicit comment on a whole raft of unfocused issues tend to produce internally inconsistent outcomes," he writes. "There is a natural tendency for the commissioners to succumb to the special pleadings of various industry interests seeking to impose unnecessary regulations on their competitors."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation