August 4, 2004 · Tim Wu
The FCC today tenatively concluded that most Voice-over IP providers will likely have to comply with a major federal wiretapping statute, the Communications Assistance for Law Enforcement Act (CALEA). This means companies like Vonage will probably soon have to provide law enforcement with some way to tap their service.
I don’t consider the vote particularly surprising — VoIP phones look like telephones, and who’s going to vote against national security? But I nonetheless think the approach unfortunate.
Here’s why. VoIP, despite the incessant hype, is still a baby. There has still been more said about VoIP than actually using VoIP. Yet this infant has already attracted more regulatory attention than many grown-up technologies. That kind of attention is not a good thing for a youngster: too much light makes the baby go blind. Its a bad thing to have startups spending their time thinking about regulatory compliance instead of better service. Having the the FCC and Congress as foster-parents is at best like being a child-star and at worst like being raised by alcoholics. Either way, stunted growth is a likely outcome.
I think the FCC and Congress do better to regulate what actually exists, not what is supposedly “on its way.” Just think “Digital Television.”
For people who are really into this stuff, a few more notes. The FCC’s NPRM is not yet available, but we learn about it from the various statements, in particularly Chairmain Powell’s.
Two bits of what might be taken as good news for VoIP providers. First, the NPRM interestingly seems to leave both instant messaging and “disintermediated” or “unmanaged” VoIP outside of CALEA. That strikes me as good news, and a sign that that the rule-making will leave definite room for unfettered innovation in at least some areas.
Second, there’s hard statutory question, as noted by Commissioner Copps: whether VoIP is really “a replacement for a substantial portion of the local telephone exchange,” as opposed to mainly an “information service.” (The statute exempts information services from CALEA). The point is, VoIP could be a “substantial replacement” someday, but it certainly isn’t yet. Hence the silver lining for VoIP companies may be a serious risk of the rules being struck down. something Commissioner Abernathy freely admits.