July 28, 2004

Internet Telephony - a fight between giants

(Michael K. Powell of the Federal Communications Commission has pushed for reduced state controls of telephone calls over the Internet.)

State Governments, Federal Governments, Traditional Telephone companies and up-start VOIP providers are all in a fight over the regulation of VOIP. It's a powerful tool that can increase efficiency and save businesses and consumers a lot of money.

The NY Times reports Deregulation is the mantra of the main players in Internet-based phone service, a new technology that could increase competition and further drive down phone prices.

But behind the scenes, a fierce battle is emerging among rival companies and between federal and state regulators over the shape of new government regulations and control of the service, which has the potential to be the most significant development in telecommunications since the breakup of the AT&T monopoly 20 years ago.

It may take years for the technology to grab a big share of the consumer phone market, but telephone and cable companies are moving in quickly. Last week, Verizon Communications, the nation's biggest telecommunications company, announced that it is introducing the service across the nation. Even AT&T, which announced its decision to retreat from the residential phone market last week, has indicated that it will continue to sell Internet phone service to consumers.

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