S. HRG. 108–1027 VOICE OVER INTERNET PROTOCOL (VoIP) HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED EIGHTH CONGRESS SECOND SESSION FEBRUARY 24, 2004 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PUBLISHING OFFICE 22–462 PDF WASHINGTON : 2016 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 14:00 Dec 07, 2016 Jkt 075679 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\22462.TXT JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED EIGHTH CONGRESS SECOND SESSION JOHN MCCAIN, Arizona, Chairman TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina, CONRAD BURNS, Montana Ranking TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas JOHN D. ROCKEFELLER IV, West Virginia OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana GORDON H. SMITH, Oregon BYRON L. DORGAN, North Dakota PETER G. FITZGERALD, Illinois RON WYDEN, Oregon JOHN ENSIGN, Nevada BARBARA BOXER, California GEORGE ALLEN, Virginia BILL NELSON, Florida JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington FRANK R. LAUTENBERG, New Jersey JEANNE BUMPUS, Republican Staff Director and General Counsel ROBERT W. CHAMBERLIN, Republican Chief Counsel KEVIN D. KAYES, Democratic Staff Director and Chief Counsel GREGG ELIAS, Democratic General Counsel (II) VerDate Nov 24 2008 14:00 Dec 07, 2016 Jkt 075679 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\22462.TXT JACKIE C O N T E N T S Page Hearing held on February 24, 2004 ....................................................................... 1 Statement of Senator Allen ..................................................................................... 36 Statement of Senator Breaux ................................................................................. 39 Statement of Senator Burns ................................................................................... 7 Statement of Senator Cantwell .............................................................................. 6 Statement of Senator Dorgan ................................................................................. 11 Statement of Senator Lautenberg .......................................................................... 10 Prepared statement .......................................................................................... 10 Statement of Senator Lott ...................................................................................... 8 Prepared statement .......................................................................................... 8 Statement of Senator McCain ................................................................................. 1 Statement of Senator Nelson .................................................................................. 96 Statement of Senator Sununu ................................................................................ 4 Statement of Senator Wyden .................................................................................. 2 Article dated February 24, 2004 from Wall Street Journal entitled ‘‘Voice Over Internet Protocol (VOIP) of the People’’ by Hon. John Sununu ...... 3 WITNESSES Alexander, Hon. Lamar, U.S. Senator from Tennessee ........................................ 11 Prepared statement .......................................................................................... 14 Britt, Glenn A., Chairman and Chief Executive Officer, Time Warner Cable ... 63 Prepared statement .......................................................................................... 64 Citron, Jeffrey, Chairman and Chief Executive Officer, Vonage Holdings Cor- poration ................................................................................................................. 48 Prepared statement .......................................................................................... 50 Post, Glen, Chief Executive Officer and Chairman of the Board, CenturyTel ... 86 Prepared statement .......................................................................................... 88 Powell, Hon. Michael K., Chairman, Federal Communications Commission ..... 18 Prepared statement .......................................................................................... 21 Werbach, Kevin, Founder, Supervova Group, LLC ............................................... 42 Prepared statement .......................................................................................... 44 Wise, Hon. Stan, Commissioner, Georgia Public Service Commission and President, National Association of Regulatory Utility Commissioners (NARUC) ............................................................................................................... 57 Prepared statement .......................................................................................... 59 APPENDIX Hollings, Hon. Ernest F., U.S. Senator from South Carolina, prepared state- ment ...................................................................................................................... 101 Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared statement ........... 101 Response to written questions submitted to Hon. Michael K. Powell by: Hon. Barbara Boxer ......................................................................................... 104 Hon. Byron Dorgan ........................................................................................... 103 Hon. Ernest F. Hollings ................................................................................... 102 (III) VerDate Nov 24 2008 14:00 Dec 07, 2016 Jkt 075679 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\22462.TXT JACKIE VerDate Nov 24 2008 14:00 Dec 07, 2016 Jkt 075679 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\22462.TXT JACKIE VOICE OVER INTERNET PROTOCOL (VoIP) TUESDAY, FEBRUARY 24, 2004 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 9:33 a.m. in room SR– 253, Russell Senate Office Building, Hon. John McCain, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA The CHAIRMAN. Good morning. Today, the Committee examines voice over Internet protocol, or VoIP, a technology that enables voice to be carried over the Internet. While this technology is not new, recent advances have enhanced the quality of voice services delivered using Internet protocol such that VoIP may now be com- petitive with traditional telephone services. VoIP holds the promise of unleashing many new competitors for a voice service that was once the province of a regulated monopoly. Numerous large communications companies have announced plans to offer voice services using Internet protocol; likewise, many small- er entrepreneurial companies have begun offering these services, posing another challenge to established providers of telephone serv- ice. Numerous state regulatory agencies have made announcements of their own, expressing an interest in regulating these services. And the FCC recently launched a proceeding to examine the appro- priate treatment of this technology. In many ways, VoIP is a microcosm of the broad array of tele- communications regulatory issues that have been debated since the passage of the Telecommunications Act of 1996, including the role of state regulators, the legal classification of services, universal service, access charges, emergency services, and access by people with disabilities. It’s been nearly 8 years since the passage of the 1996 Telecommunications Act. In that time, the telecommunications industry, the technology it relies on, and the services it offers have all changed dramatically. The Internet has changed the world and the way we communicate. And yet we continue to regulate the telecommunications industry under the confines of an outdated statutory regime that has been rendered largely obsolete by technology. VoIP is a case in point. The FCC is forced to shoehorn a newly emerging technology into Congress’s 1996 vision of communications regulation, and to clas- sify, as either fish or fowl, that which may be neither. (1) VerDate Nov 24 2008 14:00 Dec 07, 2016 Jkt 075679 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\22462.TXT JACKIE 2 Sponsors of the Telecommunications Act will undoubtedly herald VoIP, and the potential competition that may result, as the product of their legislative efforts. But the truth is that the emergence of VoIP has very little to do with the pages and pages of law written by lobbyists or the thousands of regulations spawned by the Tele- communications Act. VoIP is born out of advances in technology, something that is nearly impossible to regulate. We began the 108th Congress with a hearing on the state of com- petition in the industry, and I reminded the public, the FCC Com- missioners, and my colleagues that, in my long-held beliefs, that the 1996 Act is a fundamentally flawed piece of legislation. Since then, some of my colleagues have joined me in expressing the need for Congress to take a serious look at reforming the Act. We begin that examination today with a look at VoIP, one example of the new and emerging technologies and services that increasingly blur the lines drawn in