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January 14, 2008

Embarq proposes fee increases for VoIP

On January 11, 2008, Embarq filed this petition asking the FCC to forbear from any application of the Enhanced Service Provider (“ESP”) exemption to IP-to-PSTN voice traffic.

What does this mean? Well, if granted, it could raise the cost of broadband users who want to talk with their analog counterparts – thus putting a toll booth on the digital transition. Economists have suggested that elimination of the ESP exemption for VoIP, as Embarq proposes, would raise rates on broadband voice users by as much as $200 million a year industry-wide. For free services, it could make the difference between whether the services can even be economically offered to consumers.

Embarq claims that the ESP exemption has given one class of voice users an unfair advantage because it originates on an IP network. At one point they call it “free riding on the PSTN” and at another point they amazingly say that without the petition “rural consumers lacking access to broadband services would be obliged to subsidize VoIP providers and consumers.” These arguments ignore the facts that Embarq is already compensated for use of its network, that Embarq gets a free ride for the calls it terminates to VoIP users, and that Interconnected VoIP users pay twice what Embarq users pay to subsidize rural phone customers (including Embarq’s) through universal service. Although they use quotes from FCC decisions suggesting that Interconnected VoIP is a replacement for traditional phones, their petition does not distinguish between interconnected VoIP and other types of Internet communication – applying access charges to all forms of Internet voice traffic. Contrary to most economists, Embarq further argues that their petition is in the public interest because (raising the cost of broadband applications) accelerates broadband adoption.

Just to be clear, I do not believe the Embarq petition is in the public interest. I find their arguments to be both misleading and at times ignorant. I am asking the Internet Communications Industry to work closely with the VON Coalition and help make sure the Embarq petition is NOT granted. If you would like to learn more about the VON Coalition, please feel free to contact Jim Kohlenberger.

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Tags: , , , , , Jeff Pulver

Posted by jeff on January 14, 2008 04:16 PM | Permalink

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i was having an interesting conversation the other day when a group of friends and i concluded that cheap termination to PSTN has actually held back adaptation of true peer2peer VOIP without PSTN interconnect.

what i am seeing is that interest in VOIP is overwhelmingly for use in one direction from IP to the PSTN; even when user know there SIP address the are often reluctant to reveal it to anyone for not wanting to create confusion. they are simply look to save on outbound calls to regular phones.

while i hope the embarq petition is not granted it could have the side affect of getting people converted over to true VOIP2VOIP calling using SIP URI's in place of phone numbers. i also believe that anything that creates momentum towards true VOIP2VOIP calling will also in the long term drive down the cost of call termination for everyone as the tradition telecos feel the pressure to lower rates in response; this is an issue of particular importance when it comes to mobile phones in place like europe where termination charges are very high.

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