Rick Cimerman Senior Director State Telecommunications Policy

1. Hastening The Transition To IP Networks: Implications For Consumers,Industry, And RegulatorsJune 8, 2004 Rick Cimerman Senior Director State Telecommunications Policy

2. Balancing Responsibilities and Rights: A Regulatory Model for Facilities-Based VoIP Competition • “Only a minimally regulatory framework can create the right incentives and a favorable climate in which service providers can invest, innovate, and deploy VoIP services.”

3. Summary • Cable Deployment • Distinguishing Among Services • Responsibilities and Rights • Facilities v. Non-facilities based • Role of States • Regulatory Classification

4. Distinguishing Among Various Flavors of VoIP • Which services are unregulated? • Which services are regulated? • Four-prong test • How are those services regulated?

5. Four-Prong Test • Baselinetest to determine whether an IP-based voice service should be subject to any regulation at all: • makes use of North American Numbering Plan (NANP) resources; • receives calls from – or terminates them to – the PSTN; • and, represents a possible replacement for POTS • uses IP from the service provider to the end user including use of an IP adapter or IP phone

6. Responsibilities and Rights • Public Health and Safety • Universal Service • Intercarrier Compensation • Consumer Protection • Inappropriate Legacy Utility Requirements • Rights of VoIP Providers

7. Responsibilities • Public Health and Safety • CALEA • E-911 • Disability access • Funding Obligations • Universal Service • Intercarrier Compensation

8. Rights • Interconnection • Numbering resources • E-911 databases • Optionally file access and end-user tariffs • Compensation • Poles, ducts, conduits, ROW

9. Rights of VoIP Providers • to interconnect and efficiently exchange traffic and control signaling with both IP and PSTN entities on a peer-to-peer basis • to obtain telephone numbers, including numbers secured through number portability, to assign those numbers to VoIP customers, to have them published in incumbent providers’ telephone directories and included in incumbent providers’ directory assistance databases ; • to access the facilities and resources necessary to provide VoIP customers with full and efficient 911/E911 services (e.g., the Master Street Address Guide and ALI database uploads);

10. Rights of VoIP Providers • right, but not obligation, to establish uniform, enforceable, efficient terms for carrier interconnection for all service types (e.g., file access tariffs, w/ streamlined review); • right, but not obligation, to establish uniform, enforceable, efficient terms for end user services (e.g., file end-user tariffs and price lists, w/ streamlined review); • fair compensation for terminating traffic delivered from other entities, in accordance with the results of an industry-wide review of payments for traffic termination and origination that specifically addresses VoIP service; • right to draw from universal service mechanisms for high-cost/rural and low-income support; • and, access to poles, ducts, conduits and rights-of-way

11. Inappropriate Legacy Utility Requirements • VoIP services should not be subject to legacy service requirements generally applicable only to monopoly carriers • equal access • tariffing • service quality requirements • operator services/directory assistance • billing requirements

12. Facilities-Based vs.Non Facilities-based • Many types of VoIP • Cable VoIP – generally no use of public Internet • Shouldn’t face more regulation merely because facilities-based • Broadband regulation unneeded

13. Role of States • Generally applicable consumer protections • State PUC oversight, enforcement and dispute resolution of carrier-carrier interconnection issues • In some instances, universal service

14. Regulatory Classification • Could begin with Title I and layer on responsibilities and rights, or begin with Title II and forbear significantly from a number of responsibilities. • Better to turn up the heat? Or turn down the heat?

15. Regulatory Implications • Multiple approaches/business models from cable operators • We’re a long way from “figuring it all out” • Regulation shouldn’t unduly influence business models • Many different models may flourish

16. Summary of Key Points • Bright line test to distinguish among services • Cable stepping up to plate re: social responsibilities • Fulfilling the promise of the ’96 Act re: facilities-based telecom competition • Regulatory classification less important than establishing appropriate set of responsibilities and rights • But minimal regulation crucial