Back from my speech this morning. I had a great conversation with Steve Kelley about the “layer cake” problem that VoIP regulation presents. After scribbling a few things on a pad of paper, it was time to give my talk but I thought it would be a Good Thing to get the scribbles into this blog. Read on for the details…
Suppose you decided to approach regulating VoIP (or any other telecommunications thingy) from the standpoint of regulating differently depending on what layer that thingy was. Here’s a picture of the layers;
The bottom layer is the physical link between you and your provider. It could be copper wire to the phone company, coax cable to the cable company, fiber optic cable, a microwave radio link, a laser link, etc. It’s the physicall stuff that makes the connection. Very expensive to put in, very unlikely that you’re going to have these connections to more than one place. Aka a natural monopoly.
The middle layers make the connection between your physical stuff and the physical stuff at the destination. Phone switching (SS7), TCP/IP, routers, switches, all fall into this layer. It’s where ISPs and CLECs sit, and it’s much easier to have competition at this layer — witness all the ISPs and CLECs that popped up in the mid-90’s.
The top layer is the application that you actually use to get things done. An email browser, a web browser, a database, or a VoIP software/hardware package all fall in this top layer and there are virtually no barriers to competition at this layer. There are lots and lots of web pages, VoIP phone companies, email providers and so forth and the problems of monopoly are virtually non-existant. So one view would be to say — “hey, there’s no need to regulate VoIP at all, it’s just an application.”
But wait, what if we added the notion of a “service” to the mix. We might say, let’s regulate similar things in similar ways. Here’s another picture;
Now, in addition to thinking about layers, we think about the “service” that is running across those layers. Perhaps we should regulate all TV the same, all phone-calls the same, etc. If you deliver TV pictures over cable or the Internet, what’s the difference? They’re TV pictures and it’s silly to have completely different regulation for each — they’re doing the same thing. If it walks like a duck, quacks like a duck, it’s a duck. In the case of VoIP, the argument would be — “either regulate VoIP like POTS, or remove the regulation from POTS” and put them on a level playing field.
But wait… What about the technology that’s being used? Doesn’t that enter into the discussion as well? Here’s a picture;
This is a tricky thing — especially in light of the current enthusiasm for protecting “The Internet” from regulation. If you make regulatory decisions based on technology, perhaps the baby goes out with the bathwater. Depending on where I wanted the outcome to wind up, I could pick my argument to use the technology dimension to trump all the other dimensions.
There are more dimensions, but I don’t know how to draw pictures with any more dimensions than 3, so I’ll stop here. I think the point of this ramble is that the regulatory picture around VoIP can be “segmented” a lot of different ways. If I were trying to push an argument, I would put this segmentation into my bag of tricks and use it to push things into a configuration that favored my outcome.
