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The Telephone Revolution

Local businesses and consumers start swapping wired phone lines for phone service over the Internet


June 17, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

The end of the telecom industry as we know it?

Telecommunications services over the Internet are causing a shakedown in the industry, with cable companies entering the phone business and phone companies responding in kind

What do Florencio Berrios, Jeronimo Esteve-Abril, and Federal Communications Commission (FCC) Chairman Michael Powell have in common?

They are all gung-ho about Voice over Internet Protocol (VoIP).

"Over what?" you ask. Don’t worry if those funny letters aren’t familiar to you, they soon will be.

Mueblerias Berrios and Bella International are only two of the many businesses in Puerto Rico that already have traded their traditional phone systems, where the voice signal travels over copper wirelines, for VoIP, where voice is converted into a digital signal that travels via the Internet.

VoIP is poised to become the most economical mode of communication for businesses and consumers alike, leaving behind the traditional telephony systems.

VoIP is growing in acceptance, and it seems inevitable that this cheaper, more efficient technology will play an important role in the world’s telephone communications. It can also mean immediate cost-savings and improved efficiency for businesses that choose to implement it now.

One reason this new technology is going to be cheaper than regular phone service is the federal government’s policy to regulate the Internet as little as possible to foster its potential for economic development. "It is the policy of the U.S. to promote the continued development of the Internet and other interactive computer services and to preserve the vibrant and competitive free market for these services, unfettered by federal or state regulation," said Powell in a recent statement.

"Whether we are talking about Internet voice services…or Internet commerce, the broadband revolution is bringing tomorrow’s communication and commerce tools to more and more Americans everyday," he added. "These new opportunities for consumers are also providing new opportunities for our nation’s economy. The need to rip out and replace the nation’s infrastructure is stimulating previously moribund capital spending; it is opening new paths to growth and increasing our nation’s productivity; and it holds out the promise for new jobs as businesses and consumers increasingly unleash the power of broadband."

What is it?

Although VoIP is almost a decade old, many people are still in the dark about how it works, its benefits, and its consequences.

"VoIP is a just a new application of an existing technology, IP [Internet Protocol], which in the past few decades has turned into a commercially viable technology," said Tomas Perez Ducy, sales & marketing vice president of Puerto Rico Telephone (PRT), which is preparing to launch VoIP service in the next few weeks.

"VoIP began to gain visibility when people began to realize it was a new technological alternative to traditional telecommunications that might have a different regulatory treatment by federal agencies. That special treatment might allow for lower communication costs and for other companies to enter the telecommunications market," said Perez Ducy, referring to the U.S. Congress’ mandate that the FCC minimally regulate the Internet.

"This brings up a few questions, such as ‘Is this going to completely replace existing phone technology?’ ‘Is this going to complement what we already have?’ and ‘What will be the consumer’s acceptance of this technology?’" said Perez Ducy.

VoIP uncovered

VoIP, also known as IP telephony, allows users to make telephone calls using a high-speed Internet connection [aka broadband, such as via cable modem or digital subscriber line (DSL)] instead of a regular (analog) wired phone line, which lets consumers avoid toll charges from long-distance carriers.

Depending on the company providing the services, communication can be accomplished using a computer, an IP phone, or a traditional phone with an IP adapter.

VoIP technology first appeared in 1995 from a company that offered voice communication services using computers and an Internet connection. This service was very limited, however, since both parties needed the same special equipment to make the call and no calls could be made outside the system.

Since then, VoIP has become a tool that enables users to communicate with anybody in the world via local, long-distance, mobile, and international calls. It doesn’t matter if the person on the receiving end is using an analog or IP phone. Calls can be made anywhere in the world there is a wired phone, a wireless phone, or an Internet connection.

VoIP follows the same concept as email, whereby people can be connected worldwide through messages sent via Internet. When using e-mail, it doesn’t really matter where the message is being sent–it will cost the same whether sent to the next-door neighbor or to someone in Japan–as long as the connection is made completely over the Internet. The message is transformed into a digital signal that travels through the Internet until it reaches the intended recipient.

In VoIP, voice is also converted into a digital signal that travels over the Internet until it reaches the other party, where it is then converted back into voice. Today, this whole process occurs without any of the parties noticing any difference in call quality. The calls are made and received just as they would be using a traditional phone.

Although VoIP calls work just like regular phone calls, VoIP users have the advantage of being able to receive additional features and services such as video and data combined with voice in the same call. In the beginning, the quality of VoIP calls was inferior to that of traditional phone calls. People using IP telephony experienced fragmented conversations, for example.

"The delay...was caused by how voice was delivered through the Internet. Voice, when converted into a digital signal, travels in packets, each carrying a part of the conversation," said Javier Colon, director of information technology (IT) at Falcon Sanchez Consulting Group. Packets are chunks of information broken up into small portions for routing.

"As the packets entered the Internet, they were confronted with thousands of other packets that were being carried through the system, causing the packets to be divided or delayed," continued Colon. "In data communication, we wouldn’t notice this delay.

It is entirely different, however, when using voice. We don’t like our conversations to be fragmented, and we do notice when it happens."

"Today, there are systems to manage voice packets as distinctive digital signals that receive priority over data packets. This enables communication that isn’t fragmented but instead is virtually seamless," said Roberto de la Mora, IP director for Latin America at Cisco Systems Inc. "The quality of this kind of voice communication now equals and in some cases surpasses the quality using traditional systems."

How to place a VoIP call

Placing a call with VoIP is pretty much the same as placing a call using a traditional wired (analog) phone. The only difference lies in how and where the phone is connected.

Depending on the company providing the VoIP service, calls can be placed through a wired (analog) phone connected through an Internet adapter, an IP phone connected to a high-speed Internet connection, or a computer equipped with telephony software (a softphone), a microphone, and other audio devices to talk to and hear the person on the other end of the call.

According to industry experts, an average of 60% of all networks’ communication updates in Puerto Rico are related to VoIP. Based on that information, the majority of them expect to see more than half of all midsize and large businesses on the island working in IP-enabled environments within the next three years.

Even with this large number of businesses adopting VoIP technology, companies such as Cisco and Nortel advise managers to evaluate their existing network before deciding whether to rip out and replace any infrastructure.

"We advise businesses to analyze their network–what they have, bandwidth, and volume of data and volume of calls. Only after considering all this should they make any changes," said de la Mora. "VoIP is already in the mass-adoption phase, as the technology has matured and developed enough to eliminate bugs and adapt better to the communication needs of any business."

VoIP calls can travel through local or wide-area networks (LANs, WANs) and the Internet backbone until they reach their destination. If the person receiving the call isn’t within those systems, the call is directed to a public switched telephone network (PSTN) for routing to its destination through traditional phone lines.

"These connections and conversions of signals happen seamlessly, making it almost impossible in some cases to determine if the call is being made through traditional or IP telephony," said Pedro Valero, area manager for Puerto Rico at Nortel Networks Corp.

"This means you won’t incur long-distance charges if you call a number in your area code, regardless of geography. This is one of the technology’s major benefits for business users. It could dramatically reduce their intra-island and long-distance charges," said Victor Rivera, sales & marketing director of WorldNet.

The difference is evident on the phone bills, as calls that stay within the Internet system are less expensive. "Savings on phone bills for midsize and large businesses can be seen, especially when calls remain IP as they travel within the company’s WAN," said Valero.

"How much each business saves on communication costs depends on its calling volume," he added. "The higher the calling volume, the more cost-efficient VoIP becomes. In many cases, a business with high call volumes can easily justify any change to the communication infrastructure, since the return on investment can be seen in less than a year."

One of the main advantages of VoIP is that voice and data can travel together, lowering costs for businesses and increasing the opportunities for providers to offer their customers packages of bundled services.

"In the case of Liberty Voice Links, consumers using IP telephony will immediately see savings on their bills. They will be integrating several services under one bill, for which they can receive discounts," said Jose Alegria, president of Liberty Cablevision of Puerto Rico Inc.

Liberty recently introduced its IP telephony services to almost 300,000 homes with Liberty Cable service, becoming the first company in Puerto Rico to provide residential phone service through cable-TV lines.

Such savings may put telecommunications companies on the spot, since they threaten the traditional distance and even time-based pricing model used by all major voice-line telephone companies in Puerto Rico. Consequently, the future success of telecommunications companies could depend on their ability to integrate similar services into their roster of offerings.

"We have no doubt we will be taking away clients from Puerto Rico Telephone," said Alegria. "Our IP telephony service offers lower rates and includes 16 additional free services, such as call transfer and call waiting, for which PRT charges on a monthly basis. This type of service will increase competition in the telecommunications industry, which at the end of the day will benefit consumers."

"It isn’t easy to change services for offering through the Internet, especially for a company with traditional telecommunications services," said PRT’s Perez Ducy. "The companies offering traditional telecommunications services have a huge capital investment in older technologies, which they can’t ignore or abandon. That would have economic consequences for the company, for the user, and for calling rates.

"This change, if made without any consideration, would imply a rise in the [price of the] services we offer, because it would accelerate the equipment-depreciation process, a factor we use to determine how much to charge for our services," continued Perez Ducy. "Our challenge has been how to support this technology without throwing the industry out of equilibrium."

VoIP and the business world

The majority of companies offering to update networks for use with VoIP are prepared to work with a company’s existing equipment. One of the advantages of IP telephony is that much of the infrastructure is already in place in the form of data networks that connect users to Internet and intranet systems. Such infrastructure already understands the technology of VoIP.

"There is no need to completely replace network communication systems. In some cases, all that is needed is to adapt and convert what already exists," said Valero. "Replacing the whole network means the company would need to make a big investment. That investment can’t be made by many companies in Puerto Rico."

According to experts, most of the companies that choose to completely change their networks are those that have obsolete equipment or are setting up new offices elsewhere. Businesses have the option to only integrate IP telephony into parts of their network. They can determine which branches or departments would benefit more from the technology and implement it only there.

"This could be a progressive change, where the equipment is switched as older equipment needs to be replaced, or as companies benefit from the savings generated from the first of the new equipment installed," said Eduardo Rivera, sales manager Caribbean Region at Nortel Networks.

In an office, telephones might be connected to a switchboard or a private branch exchange (PBX), a device designed to patch a number of phones or extensions into an outside line. For those offices, network experts might add a gateway and a router to translate telephone (voice) signals into IP and send them over the data network.

A typical example of the transition to IP telephony in Puerto Rico can be seen in furniture chain Mueblerias Berrios.

"A few years back, Berrios moved its facilities to Cidra, which raised the issue of what to do with our obsolete switchboard. We started to look for something better, which led us to Cisco," said Claudio Argote, director of information systems management at Mueblerias Berrios. "Cisco offered us the option to include voice and data in one system. This meant we were going to have just one installation, a common place for data and voice. This resulted in lower maintenance costs, making things simple and efficient for us.

"Any company has the same need: the communication of data and voice," continued Argote. "Berrios is a furniture chain almost all of whose stores are showrooms. They depend heavily on direct communication with Berrios’ central offices to receive and deliver products. We make the commitment to deliver the furniture as soon as the buyer’s credit has been approved. This requires a system that is fast and accurate."

According to Frank Santiago, president of Netxar Technologies Inc., companies should also consider how much they are spending on maintenance for separate voice and systems, since each typically requires a unique set of maintenance professionals. "They also should take into account expenses from outsourcing those maintenance services. If they compare those numbers against what they might save with IP systems, they might be able to justify the switch," he said.

"Berrios saved up to 50% on the installation cost, as the network needed only one cable," said Argote. "In addition, we are now saving on what we used to spend on internal, store-to-warehouse communication."

"There are many businesses, like Mueblerias Berrios and Bella International, using VoIP. Government offices such as Hacienda [the Department of the Treasury] are also moving to VoIP," said Alvaro Pilar, general manager of Centennial Broadband in Puerto Rico. "Many of the main applications, besides long-distance calling, are for communication within internal networks. Bella International, for instance, has integrated voice, data, and video."

Although one of the main advantages of VoIP is savings on long-distance calls, there are other advantages to be had by incorporating other devices.

"Businesses can enjoy greater benefits when using IP phones or softphones. Since voice and data are sent through a data network, people on both sides can exchange information, documents, and even images with the addition of an IP video camera," said Rivera. "For example, I can talk to and see the person I am calling while we both look at the document we need to discuss; we can even make changes to it from both sides. People in different locations can work together, regardless of their distance; this increases productivity."

VoIP also enables workers to stay connected when out of the office, even if in another country. Since IP phones are smartphones that allow users to log in from any other IP phone or softphone in the world, calls are redirected to wherever the person is–without interrupting the communication or having to go through a third person.

"The person is even able to pick up an IP phone, travel to another branch, and connect the IP phone to the network and log in. That person could be in Japan and nobody would know. Calls go through seamlessly, without interrupting the work flow," said Valero.

Users could also use their VoIP service wherever they may be traveling, as long as there is a high-speed Internet connection. The call would work the same as from their home or office.

"I can receive my calls, faxes, and any other communication when I am working at home," said Valero. "I just log into my computer’s softphone, which connects through the Internet, and that’s it. I am available to anybody who might need to communicate with me. I am able to work just as well as if I were in the office."

Added Santiago, "The advantages and uses of IP technology aren’t limited to one market. Businesses across the island and across sectors are taking advantage of the system. At the end, the needs of each business are the same."

"We are in a new generation of VoIP," said Cisco’s de la Mora. "We aren’t talking about a new type of PBX or the cost of calls. This is about doing something more with your communication systems, such as adding video or turning the IP phone into a point of sale.

"There is an increasing number of applications that are turning this type of system into a sales tool," he continued. "For example, I stayed at a hotel some time ago that had an IP phone in each room. The IP phone started to blink. When I checked, it was the hotel’s spa sending me a message about its offers. I could even set up an appointment on the screen if I wanted."

De la Mora said the hotel could also send messages about its room service, including the hours of operation and the menu. Guests could request the items and verify the total before sending the order for processing and delivery.

"Programmers for IP phones can develop programs to take advantage of the system. They can develop programs depending on the business’ needs and what it wants to achieve," said Santiago.

"In a recent study, [research firm] Gartner said the number of IP telephony lines will surpass the number of traditional wired lines by 2007," said de la Mora. "[The adoption of] VoIP for businesses in Latin America is increasing by 67% each year, while traditional services keep dropping.

"In Costa Rica and Panama, for example, more than 85% of the top 100 businesses are testing, implementing, or using IP telephony," he continued. "Sixty percent of those [testing or implementing VoIP] will have the system up and running in less than six months."

VoIP and the home user

Although VoIP had been limited to the Internet in Puerto Rico, it is now being offered to home users via cable modem or DSL. They can cash in on savings from packaged offers that include long-distance calls and can talk on the phone while surfing the Internet without interruptions.

"We are thrilled to give our customers a truly affordable choice for all forms of communication–voice, video, and Internet access–in one bundled package," said Liberty’s Alegria. "Before our launch [of VoIP], Puerto Rico consumers had limited choices for their communication services. With the rollout of Voice Links, customers who sign up for our complete bundled package can save more than $60 a month on their combined voice, video, and data services."

Customers subscribing to Liberty’s services only have to plug their regular (wireline) phone into the back of the cable modem. The company is offering a choice of five calling plans, with packages that include unlimited local calls, 9-1-1 service, and discounted long-distance calls.

Consumers will be able to use VoIP from PRT through a DSL connection. The company will give consumers advice on which equipment best fits their needs and lifestyle. The choice could be an IP phone connected to a DSL modem, a traditional phone connected to an IP adapter and then to a modem, or a softphone.

"Although we are aware there have been enterprises offering the new VoIP services, we haven’t been able to make enough tests of those services to conclude how good they really are," said PRT’s Perez Ducy.

"We have conducted several tests [to offer VoIP through cable modem]," said Centennial’s Pilar. "We are evaluating the possibility of working with Net2Phone, which is working with Liberty, and our own soft switch."

Net2Phone’s platform permits cable operators such as Liberty to deploy telephony services easily via a fully outsourced solution, enabling them to offer quality services to their customers, reduce churn (a measure of the number of subscribers who leave or switch to another carrier’s service), generate incremental revenue, and keep operating expenses at a minimum.

Net2Phone tracks and monitors voice quality and network performance from start to finish. Consumers benefit on two fronts: inexpensive stand-alone telephony when compared with traditional phone service and savings derived from the triple play of cable TV, high-speed Internet access, and telephone services.

Experts in the telecommunications and cable industries agree the best thing about these changes is they will mean more competition and, in turn, better pricing for consumers.

According to Pilar, although there will be more companies providing telephony services in Puerto Rico, PRT will remain the leader. "PRT still has a lot of power with the government, regulations, and pricing, as it has 1.2 million phone lines on the island," he said.

Regarding PRT’s ability to integrate VoIP into its network, Pilar said, "I believe VoIP services for PRT may not be the same, as almost its entire infrastructure is based on copper lines and not fiber optics. Although it is possible to use copper lines for VoIP, the bandwidth is limited.

"PRT’s fiber-optic lines are used mainly to connect its own networks," continued Pilar. "According to PRT’s financial statements, it has fiber-optic lines in 200 buildings in Puerto Rico, compared with our more than 1,300."

"We are very careful about when we introduce a service to the market," said Perez Ducy. "Although we are technologically capable of installing fiber-optic lines in every house in Puerto Rico, it would be too expensive for us and thus for the consumer. We have to have a balance between what it costs and what the consumer can afford. Fiber in every house isn’t going to happen in the next 60 to 80 years.

"However, we don’t reject the possibility of installing fiber-optic lines in places with high call volumes, which might justify the installation costs," he continued. "Our VoIP service through copper lines is going to be the same as what customers would receive through fiber. Copper lines can handle what home users will require without any problem. Only when video is added might greater bandwidth be needed."

"Once we install fiber in a home, our [phone companies] providing video is imminent, and that might be scary for cable and satellite companies," said Perez Ducy. "Telecommunications will be able to venture into that [video] market, merging the two industries."

In fact, Verizon has announced it is testing video services via fiber-optic lines in some parts of Florida.

Keeping up with the times

TLD, TData, PRT, and other telecommunication companies are preparing their networks for VoIP. Others, such as Sprint Puerto Rico and Centennial de Puerto Rico, have been offering VoIP services to businesses for several months. Yet, these companies may face their greatest competition from cable companies such as Adelphia and Centennial, which will follow on the heels of Liberty to launch their own IP telephony services and venture into telecommunications.

"It is time for VoIP to be presented to the market and to be added to our roster of services," said Perez Ducy. "PRT has been doing tests for some time with our network of employees representing the local market. PRT is studying every detail related to the service, including quality, security, confidence in the service, and equipment."

Perez Ducy said PRT will roll out VoIP service in the next few weeks. "We have been prepared to launch the service for some time, but our efforts have been concentrated on the reduction in calling zones and our DSL and wireless services," he said.

"Liberty and Centennial are working together to provide VoIP to Liberty’s customers," said Pilar. Centennial de Puerto Rico is the holding company of Centennial Cable TV, serving more than 38 municipalities in the west and south of Puerto Rico. "Centennial Cable TV is preparing to provide a two-way connection, whereby information can be sent and received, which is needed for cable modem and IP telephony services. Adelphia is sure to follow."

Adelphia is upgrading its infrastructure to add cable modem and IP telephony to its roster of services for its customers.

According to Pilar, Centennial Cable TV probably will launch its IP telephony services before year’s end. "At this time, Centennial Broadband is offering VoIP services for internal communication within business sectors," he said. "Centennial is associated with several companies to provide IP connections throughout the world. In Puerto Rico, we give PSTN services to companies such as Liberty. We receive calls into our PSTN for sending anyplace in the world."

"Although VoIP might be limited to voice now, Centennial is looking forward to integrating all services within the same [network communication] pipe," added Pilar. "Depending on their bandwidth, businesses might be able to install a router that will manage not only voice and data but also video."

"We are very interested in VoIP technology, which is becoming a viable alternative to traditional analog voice service," said Pete Pizarro, CEO of TLD and TData in Puerto Rico. "In today’s increasingly competitive world, it has become clear there will be changes in the way telecom operators provide services to their customers. We are seeing some of these new technologies being rolled out in the U.S. and around the world with positive results."

He added, "We are studying the advantages of VoIP as a converged voice and data solution and its economic viability. As we move toward a more integrated service offering, the market in Puerto Rico is going to be a very important part of our business. We are looking at various scenarios that could position our company as a leading provider of integrated converged services. There is no doubt Puerto Rico will be at the forefront of this new trend."

"We are currently focused on testing and developing cost-effective strategies that will determine which of the trends in the industry will be most beneficial to our customers, such as VoIP," said WorldNet’s Rivera. "We are carefully studying how this new technology will provide an added value to our customers. We will determine the correct time to launch this product once we are sure it aligns with our company’s commitment to excellence."

VoIP or IP telephony basically works the same regardless of which company is providing the service. However, offers may vary between companies and between residential and business services. Business users might receive a wider variety of services and greater discounts, for example, than home users.

Advantages of VoIP

  • Reduces the cost of long-distance calls.
  • Allows companies to place calls using their data network instead of the public switched telephone network, reducing the overall cost of office-to-office calls.
  • Allows companies to add or change phone extensions without having to wait for the installation of cables or devices.
  • Allows users to move from branch to branch without risking lost calls.
  • Increases the productivity of mobile workers, as they can work just as well in the office as outside it.
  • Reduces the need to install different cable or network systems for data and voice.
  • When used with IP phones, allows users to receive additional services such as conference calls, voice mail, and caller ID.
  • Allows users to send and receive data, voice, and video over the same network.
  • Allows users to send and receive calls anywhere in the world as long as there is a high-speed Internet connection.
  • Allows users to have a phone number from Puerto Rico that can be used in other states.

Disadvantages of VoIP

  • Internet voice services don’t work during power outages.
  • Service provider might not offer backup power.
  • Some VoIP providers might have difficulty seamlessly connecting Internet voice callers with the 911 emergency response center and identifying the location of such callers.
  • There are no White Pages listings.
  • Works only with a high-speed Internet connection.
  • Number portability doesn’t apply to VoIP services.
  • If there is a problem with the data network, the quality of Internet voice services suffers.


Gateway: Computer that routes the traffic from a workstation or network to an outside network. At home, the Internet service provider acts as the gateway that connects the user to the Internet. The gateway is equipped with a router, to determine where packets are sent, and a switch, which provides the path for the packets in and out of the gateway.

IP adapter: Device that transforms voice into data packets to travel through an IP network, usually connected to an analog phone.

IP phone: Considered a smartphone, the IP phone transforms voice into data packets to travel through IP networks without the need for an IP adapter. In addition, the IP phone allows the user to move from one place to another without losing calls, as the user can just log in the extension number to receive any call sent to his or her desk.

IP telephony: Technology that allows users to send voice messages through the Internet and use telephony’s common features such as call transfer, call waiting, and caller ID.

Local-area network (LAN): A computer network that extends over a relatively small area, usually confined to a single building or group of buildings. LANs are capable of transmitting data at very fast rates, much faster than data can be transmitted over a telephone line. However, the distances are limited, and there is a limit to the number of computers that can be connected to a single LAN.

Packets: A piece of a message transmitted over a network, containing the destination address in addition to the data.

Private branch exchange (PBX): Private telephone network used within a business where users share a certain number of outside lines for making telephone calls.

Public switched telephone network (PSTN): Public or international telephone system based on copper wires that carry voice data.

Router: A device that forwards data packets through networks. Located at the gateway, the router is usually connected to at least two networks. It uses headers with information that precedes the packet and protocols to determine the best path between any two hosts.

Softphone: Application or software that allows computers to work as a telephone using VoIP. It can be used with a headset, a microphone, and the keyboard to dial the desired number. It can usually perform traditional telephone functions such as conference calls and call forwarding.

Switch: Device that filters and forwards packets between networks.

Voice over Internet Protocol (VoIP): Technology that uses hardware or software to make telephone calls via the Internet.

Wide-are network (WAN): A computer network that extends over a relatively large geographical area and contains two or more local-area networks (LANs). LANs are often connected to a WAN through telephone systems, leased lines, or satellites.

FCC advocates least interference in VoIP

The biggest controversy regarding Voice over IP (VoIP) might not be the quality and cost, but how it could affect the telecommunications industry and security in the U.S. if the Federal Communications Committee (FCC) doesn’t regulate voice services over the Internet.

The National Telecommunications Cooperative Association and other organizations have urged FCC Chairman Michael Powell to declare VoIP a telecommunications service that should be regulated under federal laws. Powell has resisted, however, claiming that not regulating the Internet is important to the nation’s economic growth.

In a written statement to the U.S. Senate, Powell said, "We should begin with the nonregulation of the Internet as the first article of faith, because limiting government intrusions–both at the federal and state levels–maximizes the potential for innovation and increases opportunity for the nation as a whole."

Powell said Internet-based services such as VoIP mean the creation of new jobs to develop broadband networks & applications and productivity gains as businesses and consumers tap into the power of broadband networks. "At the same time, we are creating opportunities for small businesses and entrepreneurs to enter previously prohibited communications markets at the applications layer of the network Internet," he said.

Powell added that any regulation of VoIP, or of any other Internet-based service, should be undertaken carefully because it could impair the growth of the Internet and therefore of consumers’ ability to receive better services and offers.

"Without a doubt, VoIP will revolutionize the way consumers work and play. The choice for us as policy-makers is to create the kind of environment where these changes can flourish," he said.

According to Powell, there are clear exceptions that will require the FCC’s intervention, such as when the security and general well-being of the nation and consumers are at stake. He said, however, "We must be sure such exceptions don’t become the rule."

The Federal Bureau of Investigation and the U.S. Department of Justice have already submitted joint comments expressing the importance of retaining the government’s ability to tap phone conversations for security purposes. They noted that most VoIP calls are encrypted to prevent tapping, creating a secure communication system for terrorists and other criminals.

"It is our understanding that law enforcement will soon be filing a petition requesting that the commission initiate a proceeding to help set standards by which the success of Calea [the Commission on Accreditation for Law Enforcement Agencies Inc.] with respect to earlier services can be extended to Internet voice services," said Powell. "The commission will devote the resources necessary to expeditiously and responsibly complete this task."

"In the interim," added Powell, "it must be emphasized that carriers, the law enforcement community, and the commission are working in partnership to ensure that law enforcement retains access to the information it has now and that it has the tools needed in this ever-changing environment."

This Caribbean Business article appears courtesy of Casiano Communications.
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